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

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

This integrated solution streamlines and simplifies payment processing while mitigating the higher interchange fees automatically applied to credit cards accepted from other businesses or government.

Merchants utilizing this service are automatically enrolled in Revolution Payments free commercial card interchange optimization program. This lowers the interchange cost of accepting commercial cards, i.e., commercial, purchase, fleet, government and business cards by 1%-1.5%.

Level II/III eligible transactions are automatically updated, no manual entry required. This saves a business both time and money.

Features

• 100% Salesforce native
• Credit card & ACH
• Payment request invoicing
• One-time or recurring billing
• Payments in Salesforce communities

Merchants interested in learning more about Revolution Payments Level III Credit Card Processing Solution for Salesforce Users can reach us at  888 790 3450 or email info@ revolution-payments.com

https://www.newswire.com/news/revolution-payments-announces-a-level-iii-credit-card-processing-21292711

This solution will  optimizes every credit card a government contract accepts to the lowest possible interchange rate.  Behind the scenes this powerful  automatically reclassifying government purchase cards and commercial cards  to level 3 interchange rates.

Process transactions above $5,984.62 ?  Then you automatically qualify to receive High Ticket interchange rates, if level 3 detail is provided with the transactions. This lowers the interchange cost of this transaction to 1.2%.  This reduces your Interchange Fees Associated With Accepting Government Purchase Cards by almost 1%.

Government vendors can enter level 3 detail on their own and qualify for level 3 interchange rates, however, many vendors that accept purchase cards don’t properly pass along enhanced data to qualify for these lower interchange rates.  Even though this is nothing new and been around for over 15 years, statistics show that at least 3 out of 5 vendors are not participating and others may be providing level 3 detail but are not set up in a way to receive 100% of the benefits.

Why is level 3 processing for government vendors?

Interchange accounts for the largest portion of a vendor’s credit card processing expenses (80% or more) and it’s paid to card-issuing banks. Processors and the card brands (Visa, MasterCard, and Discover) don’t see any revenue from interchange whatsoever.

To show you how powerful level 3 processing is, I will use Visa as an example.  If a vendor accepts a purchase card without level 3 detail, they will pay 80 basis points more in interchange before their processor adds their processing fee. For  transactions above $5,984.62,  a vendor will pay 1.5% more in interchange before their processor adds its fee.

This optimization service allows a vendor to recoup a large chunk of interchange revenue they cannot receive from a processor lowering its rate.

Questions about accepting government purchase cards or how the optimization service would increase your bottom line revenues, give us a call at  888 790 3450 or email info@ revolution-payments.com

Reduce your Interchange Fees Associated With Accepting Government Purchase Cards