That gap costs contractors real money, every single month, without most of them ever realizing it.

Why Government Contracting Content Skips Right Past This

A search for “how to win a government contract” turns up thousands of guides, courses, and consultants. A search for “how to get paid correctly on a government contract” thins out fast. The payments side of government contracting gets treated as an afterthought — something contractors set up once with whatever bank or processor is convenient, then never revisit.

That’s exactly the problem. Government purchase cards don’t process the same way as a typical retail transaction, and an incorrectly configured account pays more than necessary on every single transaction, every single month, indefinitely.

The Real Cost Isn’t the Processor’s Rate — It’s Interchange

Most contractors shop for a payment processor the same way they’d shop for office supplies: compare the rate, pick the lowest number. But the processor’s rate makes up the smallest piece of the total cost.

Every transaction has three components.

Interchange makes up roughly 80-90% of the total cost. Visa and Mastercard set interchange, the card-issuing bank collects it, and the rate stays the same no matter which processor a contractor uses.

Card brand assessments stay small and fixed, identical across processors.

Processor markup is the only negotiable piece, and usually the smallest slice of the bill.

A contractor negotiating hard on rate while ignoring transaction configuration is negotiating the tip on a restaurant bill while ignoring the cost of the meal.

What Level 3 Processing Actually Does for Government Contractors

Government purchase cards function as sophisticated procurement tools, not just plastic. They carry spend controls, reporting requirements, and — most importantly for the bottom line — access to special interchange categories that most vendors never use.

Visa and Mastercard created Level 3 interchange rates specifically to reward vendors who transmit detailed line-item data with each transaction: product description, quantity, PO number, freight amount, and more. Correct submission of that data qualifies the transaction for a significantly lower interchange rate. Missing or incorrect data sends the transaction into a much higher category, and the contractor pays the difference without ever seeing it explained on the statement.

According to Mastercard, 3 out of 5 vendors are not properly set up to accept government purchase cards — meaning the majority pay more than necessary on every eligible transaction, often without realizing it.

A properly configured account using Level 3 processing can reduce interchange costs by 30-40% compared to a non-optimized setup. On meaningful monthly volume, that adds up to thousands of dollars a month sitting unclaimed.

The Fastest Way to Know What’s Actually Being Paid

Confirmation that an account is “set up for Level 3” doesn’t guarantee it’s actually working. Required fields can go missing. Data can carry the wrong format. Settlement timing can fall outside the required window. Any one of these silently bumps transactions back into a higher-cost category, and only a look at the actual data behind the statement reveals the truth.

A government contractor who hasn’t had their payment setup reviewed since first accepting purchase cards likely leaves money on the table right now.

A line-by-line interchange audit shows exactly what a contractor pays, what they should pay, and where the gap comes from. Either everything checks out as correctly configured, or the audit reveals precisely how much the misconfiguration costs every month.

Questions? Call Revolution Payments at 301 790 3450 or email info@ revolution-payments.com

Many contractors unknowingly pay far more than necessary, especially on Business-to-Business (B2B) and Business-to-Government (B2G) transactions, simply because their payment systems aren’t configured to qualify for lower interchange rates.

Why So Many Contractors Pay More Than They Should

If you accept corporate, fleet, or government purchasing cards, you might assume your processor is automatically giving you the best rates. The reality? Unless your system is passing Level 2 and Level 3 data, you’re likely paying standard interchange — and leaving significant savings on the table. Level 3 processing can lower the  payment processing fees for government contractors by up to 40%.

Visa and Mastercard offer special reduced rates for these types of transactions, but only when enhanced data is submitted during the transaction.

Most payment processors either don’t support this or haven’t properly set up contractors to take advantage of it. As a result, many businesses end up spending 30% to 50% more than necessary on processing costs.

What Is Level 2 and Level 3 Credit Card Processing?

These are enhanced data levels used in commercial transactions.
When you provide extra details like tax amount, invoice number, and product line items at the time of the sale, card brands see the transaction as lower risk and reward you with lower interchange rates.

The more data you submit, the better your pricing:

• Level 1: Standard consumer-level data

• Level 2: Business data (tax, invoice, etc.)

• Level 3: Detailed line-item information for government/commercial cards

How Contractors Can Reduce Processing Costs Without Extra Work

At Revolution Payments we’ve built tools that automatically handle Level 2 and Level 3 data submission behind the scenes — no manual input needed from your team.

We work exclusively with B2B and B2G contractors, helping you qualify for the lowest possible rates on every eligible transaction. The result? Substantial monthly savings with zero operational disruption.

The Cost of Not Being Set Up Properly

Data shows that 75% to 80% of government contractors are not configured to receive Level 3 pricing. That means most are paying far more than they should on every card transaction — without even realizing it.

If your company accepts GSA SmartPay or corporate purchasing cards, you could be missing out on savings of 1% to 1.5% per transaction.

The Fastest Way to Know If You’re Overpaying

We offer a free, no-obligation interchange analysis that benchmarks your current setup against the most favorable rates offered by Visa and Mastercard.

This audit reveals whether your business is leaving money on the table — and how much you could be saving. With the next round of interchange updates arriving this April and October, now is the perfect time to optimize.

Ready to Stop Overpaying?

If you’d like immediate insight into how much your business could save, you can:

• Upload a recent statement: Click here to submit securely

• Call us directly: 888-790-3450 if you have questions on payment processing fees for government contractors.

• Revolution Payments is a SAM-registered, CAGE-coded vendor that specializes in helping government contractors reduce their interchange costs with Level 3 processing

Few contractors are aware that Visa and MasterCard offer exclusive rates that can reduce transaction fees by 1%-1.5% for those who meet Level III processing requirements. Unfortunately, 3 out of 5 contractors miss out on these savings simply because they haven’t been informed of these options. By providing Level III line-item detail, contractors not only save on processing fees but also help buyers improve their purchase card management.

Despite these substantial benefits, many contractors are set up by banks or processors that don’t specialize in government contracting. They may lack the knowledge to guide you toward the correct processing setup—missing an opportunity to reduce costs on every transaction.

With credit card fees directly impacting your bottom line, having a clear understanding of your rate structure can empower you to make smarter financial choices.

Revolution Payments has been helping government contractors process credit cards correctly, at the lowest costs for over 20 years.

Ready to optimize your government purchase card processing and your government contract? Contact us at (888) 790-3450 or info @revolution-payments.com for expert advice on maximizing your savings.

Revolution Payments is a SAM-registered, CAGE-coded vendor that specializes in helping government contractors reduce their interchange costs with Level 3 processing