Level 3 credit card processing explained

This short video explains the benefits of Level 3 processing  for  B2B and B2G businesses and how providing enhanced transaction data can significantly reduce interchange costs on eligible commercial, purchasing and government cards.

Important 2026 Update: This video was originally created when Visa and Mastercard both used the traditional Level 1, Level 2 and Level 3 interchange structure for commercial cards. Since then, Visa has made significant changes to its commercial card programs. Visa did away with Level 2 for business cards and replaced its traditional Level 3 qualification structure with its newer Commercial Enhanced Data Program (CEDP) and Product 3 requirements. Mastercard continues to support Level 2 and Level 3 processing.

Although the programs have changed, businesses still commonly use the term “Level 3 credit card processing” to describe the process of providing enhanced transaction data to qualify eligible B2B and B2G transactions for lower interchange rates.

What Is Level 3 Credit Card Processing?

Visa and Mastercard use interchange rates to determine a significant portion of what businesses pay to accept credit cards. These interchange fees are separate from the markup charged by your credit card processor.

For B2B and B2G companies accepting commercial, corporate, purchasing and government cards, the information transmitted with a transaction can have a significant impact on how that transaction qualifies and the interchange cost associated with it.

Historically, commercial card transactions were commonly described as qualifying at three different data levels:

• Level 1 – Basic transaction information typically associated with a standard credit card transaction.
• Level 2 – Additional transaction information such as sales tax and customer or invoice information.
• Level 3 – Detailed line-item information typically found on an invoice, including product descriptions, quantities, unit costs, purchase order information and other transaction details.

The important thing to understand is that these interchange qualifications are separate from the rate your processor charges.

That’s why two businesses can have essentially the same processor pricing and still pay dramatically different overall credit card processing costs.

Visa Level 3 Processing Has Changed

Visa has significantly changed the way eligible commercial card transactions qualify.

Visa did away with Level 2 for business cards, and its traditional Level 3 commercial card qualification has been replaced by newer enhanced-data requirements, including Visa’s Commercial Enhanced Data Program (CEDP) and Product 3 qualification.

Instead of simply transmitting the old Level 3 data fields, eligible transactions must now meet Visa’s current data and verification requirements to receive the available enhanced commercial card interchange rates.

This makes the technology being used to process B2B and B2G transactions even more important.

Mastercard Still Supports Level 2 and Level 3

Unlike Visa, Mastercard continues to maintain Level 2 and Level 3 commercial card interchange programs.

Providing the appropriate enhanced transaction data can therefore still allow eligible Mastercard commercial, corporate and purchasing card transactions to qualify for lower Level 2 or Level 3 interchange rates.

The potential savings depend on the card type, transaction amount, acceptance method and interchange category for which the transaction qualifies.

Why Level 3 Processing Still Matters

Whether the transaction is being optimized through Mastercard Level 3 or Visa’s newer commercial enhanced-data programs, the basic principle remains the same:

Better transaction data can mean lower interchange costs.

For businesses processing a significant amount of purchasing, government or commercial cards, properly optimizing these transactions can produce substantial savings without lowering the processor’s markup at all.

This is especially important for:

• B2B companies
• Government contractors
• Wholesalers and distributors
• Manufacturers
• Automotive and heavy-duty suppliers
• Companies accepting government purchase cards
• Businesses with large average transaction amounts

Do You Need Special Software for Level 3 Processing?

In most cases, yes.

Level 3 and enhanced commercial card processing require a payment gateway, software or integrated payment solution capable of collecting and transmitting the additional transaction data required by the card brands.

The bigger challenge is making sure the correct information is being transmitted automatically and in the format required for the transaction to qualify properly.

At Revolution Payments, our level 3 credit card processing technology is designed to automate this process whenever possible so businesses don’t have to manually enter extensive transaction data every time they accept an eligible commercial or government card.

Are Your Commercial Card Transactions Qualifying Correctly?

If your company accepts a significant amount of B2B, commercial, purchasing or government credit cards, the most important question isn’t simply what rate your processor is charging.

It’s how your transactions are actually qualifying at the interchange level.

We’ve seen businesses paying significantly more than necessary even though they had competitive processing rates, simply because eligible transactions weren’t qualifying at the best available interchange categories.

If you’d like to find out how your transactions are currently qualifying, give us a call at 888-790-3450. We’d be happy to perform a no-obligation interchange audit and show you exactly what we’re seeing.