When that enhanced data is present and passes correctly, interchange fees can be significantly lower, which makes a big difference for companies handling a high volume of commercial or government card payments.

Level 3 was introduced more than 20 years ago when Visa and Mastercard created special interchange programs to encourage government vendors to enter more detailed information when accepting purchase cards (P-Cards).

If the extra fields were included—things like purchase order number, invoice number, product description, freight, and duty—the transaction could qualify for interchange rates that were often 30–40% lower than a standard card sale.

Over time, this evolved into what we now refer to as Level 3 “transactional data”: essentially an electronic invoice with full line-item detail. It shows what was purchased, who made the purchase, and the context around the transaction. That data is attached to the payment record and sent to the issuing bank along with the authorization and settlement information.

What Level 3 Line-Item Data Typically Includes

Level 3 transactions generally include:

• Product description, quantity, unit of measure, unit price, and any discounts
• Sales tax details, where applicable
• Merchant location / establishment information
• Cardholder information and purchase order or reference numbers
• Shipping, freight, and duty amounts

Originally, this level of transparency was designed to support taxpayer oversight on government spending. Today, the same structure benefits any business accepting commercial, corporate, purchasing, fleet, or government cards.

Level 1 vs. Level 2 vs. Level 3 – What Actually Changes

At a basic level (Level 1), a transaction carries only core information:

• Merchant name
• Transaction amount
• Transaction date

Level 2 adds a bit more structure, such as:

• Customer code
• Tax amount
• Invoice or order number
• Level 3 goes much further and adds full line-item detail:
• Individual product or service lines
• Quantities, units, extended amounts
• Freight, duty, shipping, and other charges

As you move from Level 1 to Level 3, you’re essentially moving from a simple receipt to a complete invoice embedded inside the transaction.

Which Cards Can Qualify for Level 3

Level 3 processing applies to specific card types, including:

• Purchasing cards
• Corporate and business cards
• Fleet cards
• Government spending accounts
• GSA SmartPay cards

Card brands continue to adjust how these programs are structured. For example, Visa is phasing out some Level 2 options for certain business cards and pushing those transactions to qualify at Level 3 when the required data is present.

How Businesses Qualify for Level 3 Rates

To qualify for Level 3 interchange, a business needs to send the enhanced data the card brands require, through a gateway or virtual terminal that actually supports those fields.

Traditional countertop terminals aren’t designed for this. They don’t have the fields, the memory, or the workflow to support full Level 3 detail. Without the right technology (or without configuring it correctly), you simply will not qualify for Level 3 rates—even if you think you’re “set up” for it.

In practice, there are two ways companies send Level 3 data:

Manual entry of the required fields (time-consuming and error-prone)

Automation through a gateway or integration that maps and passes Level 3 fields on every eligible transaction

Many merchants are using outdated systems, incomplete setups, or gateways that were never properly configured for B2B. Industry research and field experience suggest that a large share of businesses are not fully configured to process commercial or purchasing cards at the Level 3 standard, even though they accept those cards every day.

This small technical gap increases interchange costs and quietly erodes margins. As more payables shift to corporate, fleet, and government cards, it becomes even more important to make sure you’re processing those transactions at the most efficient level.

Why Most Businesses Overpay

Even merchants who process commercial cards every single day are often overpaying because of a few recurring issues:

Flat-rate pricing instead of cost-plus. Flat-rate models tend to hide interchange improvements. A cost-plus structure makes the true cost visible and ensures Level 3 savings actually reach the merchant. Missing or incomplete Level 3 data. Skipping required fields can cause a transaction to qualify at a higher-cost category—often 50–150 basis points more on the same sale.

Improper account or gateway configuration. Many sales reps and even some providers don’t fully understand how to configure or map Level 3 fields. A misconfigured setup can cost thousands per month without anyone realizing it.

Key Benefits of Getting Level 3 Right

When Level 3 is implemented and configured correctly, B2B merchants can see:

• Interchange savings up to roughly 30–40% on eligible transactions
• Better cash flow and faster payments
• Detailed, auditable line-item visibility
• Reduced risk of disputes and chargebacks
• Easier reporting and compliance for internal and external audits

For many B2B and government vendors, simply getting the Level 3 structure right is one of the easiest ways to reduce card acceptance costs and improve margins—without changing how customers pay.

Questions about level 3 credit card processing or if you would like a no obligation review give us a call at 888 790 3450 or email info@ revolution-payments.com

If you’re wondering how government contractors can reduce credit card fees, it starts with understanding interchange — the non-negotiable base cost set by Visa and Mastercard. When P-Card transactions aren’t submitted correctly, contractors can lose out on 30% to 40% in savings before the processor even adds their fee.

Yet, 3 out of 5 contractors are still not set up to qualify for these lower rates.

That’s not because processors are doing anything wrong — it’s because most don’t specialize in this space and aren’t required to optimize interchange.
The result? Contractors unknowingly overpay tens of thousands per year.

1. Interchange Fees Are Not Set by Your Processor

In P-Card and B2B transactions, only 10–20% of your total cost is tied to the processor’s rate. The remaining 80–90% is dictated by interchange — which is determined by how the transaction is submitted, not who processes it.

2. 3 Out of 5 Contractors Are Not Set Up Correctly

Many contractors miss key configurations that are required to qualify for reduced interchange rates available on government and commercial card payments.

3. P-Cards Can Settle at One of Four Interchange Categories

These categories vary significantly in cost — sometimes by up to 1.5% per transaction — and qualification depends on meeting specific data and transaction requirements, not just the card type.

Here’s a simplified comparison:

4. Processors Are Not Required to Optimize Interchange

There’s no mandate for processors to ensure government contractors qualify for the most cost-effective interchange rates. Often, it’s simply overlooked due to how complex the rules are.

Even a rep with the best intentions could be costing a business thousands in unnecessary interchange fees — I see it every day.

Small misconfigurations, missing data fields, or the wrong rate structure can quietly add up to major avoidable costs over time.

5. “Level 3 Capable” Does Not Mean Interchange Optimized

Just because a system or gateway supports Level 3 data doesn’t mean your transactions actually qualify for Level 3 rates. Qualification depends on:

• Having the correct rate structure

• Proper data field mapping

• How the transaction is settled and batched

Final Thoughts

Credit card processing is often treated as a commodity — but for government contractors, how you accept P-Card payments can significantly impact your margin. Visa and MC created special interchange rates for Government P cards over 20 years ago yet most are not set up to take advantage of these rates.

By understanding how Visa and Mastercard structure interchange — and making sure your setup qualifies for the lowest possible rates — contractors can reduce credit card fees in ways most never consider.

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

If your business accepts corporate, government, purchasing, or commercial credit cards, you could be overpaying by as much as 1.5% per transaction. The key to unlocking lower interchange rates lies in QuickBooks Level 3 processing—a powerful solution that can slash your payment processing costs by up to 40% on standard transactions and as much as 75% on high-ticket sales.

How Level 3 Processing Lowers Costs in QuickBooks

Our QuickBooks-integrated Level 3 processing solution ensures every qualifying transaction is optimized for the lowest possible interchange rates—without any manual data entry.

With our seamless QuickBooks integration, you can:
Automate Level 3 data capture to secure lower interchange fees
Accept credit card and ACH payments directly within QuickBooks
Sync transactions in real-time with QuickBooks (A/R & G/L)
Eliminate unnecessary surcharges and benefit from cost-plus pricing
Enhance cash flow by processing payments at multiple QuickBooks entry points

Key Features of Our Level 3 QuickBooks Integration

Compatible with QuickBooks Desktop & Online (Pro, Premier, Enterprise, Accountant)
Instantly posts payments to QuickBooks A/R & G/L
Marks invoices as PAID upon transaction approval
Securely stores customer card details (PCI-compliant)
Sends email invoices with embedded payment links, automatically updating QuickBooks
Supports ACH payments for additional flexibility

Why Interchange Fees Matter More Than Processor Rates

Many businesses mistakenly focus only on their processor’s markup, assuming that’s where the biggest savings lie. However, interchange fees—set by Visa and Mastercard—make up the majority of processing costs. The only way to reduce them is by properly passing Level 3 data, which can cut costs by 1.5% per transaction—savings that no processor can offer without advanced Level 3 technology.

With our QuickBooks Level 3 integration, every eligible transaction automatically qualifies for the lowest interchange rates, ensuring that no savings are left on the table.

Why Work With Us?

Guaranteed Level 3 Savings – Every qualifying transaction is optimized for the lowest rate
Expert-Level Support – Work with specialists who understand interchange and cost reduction strategies
Complimentary Savings Analysis – Send us a recent processing statement, and we’ll show you exactly how much you can save

Questions about QuickBooks Level 3 Credit Card Processing, Get a Free Savings Review

Call us at 888-790-3450 or email info@revolution-payments.com for a no-obligation savings audit.
Prefer fax? Send your last month’s statement to 877-901-3181 for a complimentary review.

Let Revolution Payments help you reduce processing costs, improve cash flow, and eliminate hidden fees—without changing how you do business in QuickBooks.

Although commonly referred to as the federal contracting market, it’s more accurately described as the federal purchasing market. Why? Because not everything the government buys requires a formal contract. In fact, the most common purchasing method for the government mirrors that of everyday consumers: using a credit card. Last year alone, government buyers made over 95 million credit card transactions, totaling approximately $29 billion.

Chances are, your business is better equipped to accept credit card payments than navigate the lengthy and complex process of securing a federal contract. However, the challenge lies in the fact that these credit card purchases are not posted for bid—they aren’t announced, competed for, or advertised. Despite this, government buyers make these transactions over 250,000 times daily.

If you’re interested in tapping into this hidden market of federal credit card purchases, give us a call today.  Aside from gaining new opportunities, Visa and MasterCard have created special interchange rates (level 3 credit card processing) for accepting government purchase cards. This program, when set up properly, this can save you 30%-40%.

Questions? Call 888 790 3450 or email info@ revolution-payments.com

Level I, Level II, and Level III Credit Card Processing play a crucial role in defining interchange categories and qualifications for B2B and B2G credit card transactions. Implementing Level 3 credit card processing can significantly reduce the cost of accepting these transactions by up to 40% before the processor adds their fee.

Key Points:

Interchange Buckets

• Level 1
• Level 2
• Level 3
• Large Ticket

Level I Credit Card Processing

• Basic transactions between businesses and consumers.
• Includes minimal payment details: Merchant Name, Transaction Amount, Transaction Date.

Level II Credit Card Processing

• Similar to Level I but with additional details.
• Can reduce interchange costs by approximately 0.50% on certain card types.
• Tax exempt transactions are not eligible for Level II savings.
• Additional details include Tax Amount, Customer Code or PO number, Merchant Zip Code, and Transaction Date.

Level III Credit Card Processing

• Requires information from Level I and Level II.
• Additional fields include Ship From and Destination Postal Code, Invoice Number, Order Number, Freight Amount, Line Item Detail of Purchase.
• Qualifying for Level III rates requires sophisticated technology capable of capturing detailed information found on invoices.

Large Ticket Processing

• Eligible for transactions with Level 3 detail.
• Visa Commercial Product Large Ticket and MasterCard requirements outlined.
• Not eligible for certain categories like Travel and Entertainment, Restaurants, High-Risk Direct Marketing.

Important Note

• Authorizations must be settled within 2 days for Level III interchange qualification.

Revolution Payments Optimization Service

• Provides a cost-plus merchant account and a virtual terminal capable of capturing the required line item detail.
• Ensures every transaction qualifies at the lowest possible interchange rates.

For questions about Level I, Level II, Level III Credit Card Processing, or for a no-obligation Level 3 analysis and audit, contact us at 888-790-3450 or email info@revolution-payments.com. With over 15 years of expertise in Level III processing, we are dedicated to providing savings to our clients.

Make sure you work with an experienced payment professional to ensure you are set up properly to receive 100% of the incentive rates.  Questions on how you can save money with Level 3 P-card processing give us a call at 888 790 3450 or email info@ revolution-payments.com

FEDERAL PUBLICATIONS SEMINARS

Save Money with Level 3 P-Card Processing

In Episode #51, we talk with Sean Jones of Revolution Payments about how contractors could benefit from level 3 credit card processing.  The option has been around for years but not every contractor realizes it.   Though some GSA contracts require level 3, others do not, yet contractors can still take advantage of the savings.  Sean explains the history of level 3 and its  savings.

https://www.buzzsprout.com/980551/12714131

If you are like many government contractors you invested a lot of time and energy winning government contracts.  Now that you have a contract. How do you accept a government purchase card and keep more of your money.

Sean Jones, the president of Revolution Payments explains just that, in this podcast interview.

Winning government contracts and be very profitable, unfortunately  know one tells a contractor how to accept credit cards from the government in the most economical manner or that there are special incentive rates for contractors that can lower the cost of accepting government purchase cards by 1%-1.5% regardless of a processors rate.

Statics show us that 3 out of 5 contractors  are not set up to accept government purchase cards properly, meaning they are not including level 3 line item detail.  This podcast will give you an overview and why level 3 credit card processing is so important if you accept credit cards from the government.

Questions? Give us a call 888 790 3450 or email info@ revolution-payments.com

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

With the many challenges facing contractors today, many have relied on their banks to set-up their credit card processing. It’s regrettable that many in the contracting industry are unaware of the advantages that correct processing solutions can present.

Many years ago MasterCard and Visa have created special interchange rates to support purchase card programs by reducing the supplier’s transaction costs if Level III line item detail is entered when processing a transaction.

Level III processing can lower the supplier’s discount rate by as much as 1.0% – 1.5% when compared to non-Level III credit card processing, depending on the card type and the size of the transaction.

These special rates are intended to be an incentive to pass Level III, which in turn will assist buyers in managing their purchase card programs Even with the considerable advantages a contractor can receive from level III processing, it is used infrequently.

In fact, statistics show us at level 3 out of 5 contractors are not set up to accept purchasing cards properly.

The fees for accepting credit cards are a part of doing business however, having an understanding of rates and the fees that impact your bottom line will empower you to may more informed decisions Questions? Give us a call 888 790 3450 info@revolution-payments.com www.revolution-payments.com

Interchange amounts to at least 80% of the fees you pay to accept credit cards.  Not only does interchange go back to the card issuing bank, not your processor, but Visa and MasterCard apply higher interchange rates 80-150 basis points to transactions to commercial and government cards that Do Not include level 2 and level 3 detail.   When most people review their rates, they generally only look at a processors rate, even though interchange amounts to bulk of their fees.

Given the current low profit margin derived by processors today the focus should be to better manage the interchange cost and human error cost directly associated with payment acceptance.

Commercial and Government Credit Cards.

Commercial cards have the ability to qualify at lower interchange rates if, level II and level III detail is provided. Commercial cards qualify at 1 of 3 different interchange levels. Level 1, level II or level III. The higher the level, the lower the interchange cost.

Think of level II and level III detail as additional information regarding a sale.  Level II, is sales tax and invoice/customer code. Level III is like item detail. Think of information you might find on an invoice.

Visa Level III Requirements

Mastercard Level III Requirements

When this information is summitted with a transaction, interchange is lowered by 30%-40%.  I will use Visa as an example.  Accepting a commercial card without level 3 detail will cost you anywhere from 80 to 150 basis points depending on the type of card and size of the transaction.  This happens before your processor ads their fee.

Learn how to lower credit card processing interchange fees by reaching out to your processor to set up your merchant account to process level III processing information  You will need to use a level III capable gateway. Terminals do not support level III information however, there are some companies like revolution payments who provide an optimization service that runs behind the scenes and can automatically attach this information before transactions settle.

If you have questions about level III processing or how to lower credit card processing interchange fees. Give us a call at  888 790 3450 or email info@ revolution-payments.com