What is Level 3 Processing

What is Level 3 processing? To understand why level 3 processing is so important if you accept commercial or government credit cards, keep in mind 80% + of the fees businesses pay to accept credit cards (interchange) goes directly back to the bank that issued credit cards.  Processors receive no revenue whatsoever from interchange.

One reason banks issue credit cards is because they receive the interchange rates anytime of of your customers pays you with a credit card.  Although interchange is the same regardless of the processor you choose, making sure you have a level 3 merchant account, and cost plus pricing, you can capture a large chunk of interchange revenue that will otherwise go back to the card issuer.

Accepting commercial or government  credit cards without  level 3 detail. You will always pay about 1% more than the best rate you can receive from a processor!

Visa and MasterCard use “interchange fees” to determine how much you pay an issuing bank each time you accept a credit card order.


What most businesses have not been told is that commercial, business and government transactions fall into one of 3 interchange categories — Level 1, Level 2, and Level 3 – with 1 being the highest rates and 3 being the lowest

The different tiers depend on whether level 3 detail is entered, if not, the transactions clears at a different interchange rate (level 1) and has an interchange cost of roughly 1% more.  This happens before a processor applies whatever rate they are going to charge.

To see this for yourself Google Visa 2018 interchange rates.


Page 13 You will see interchange for commercial cards.


  • Commercial Level III 1.90% + $0.10
  • Commercial Level II 2.50% + $0.10
  • Commercial Card Present 2.50% + $0.10
  • Commercial Card Not Present 2.70% + $0.10


You either pay an interchange charge of 1.90% or 2.7% before your processor adds their fee.  Yes, having a low (processors) rate is important however, since 80% or more of the fees you pay to accept credit cards is non related to your processors rate. Why not make sure your set up so your B2B & B2G transactions clear at the lowest possible interchange rates.


What Revolution Payments offers is a proprietary payment solution, that works like this, For all credit card transactions … whether processed online or entered manually on your PC or mobile … our system identifies the cards accepted and automatically populates and attaches level 3 detail w/o you having to manually enter the 7-13 addition fields otherwise require


This adds from .80%-1.5% new “interchange” revenue to your profit margins before I look to see what your processor is charging.

What is Level 3 Processing? Take advantage of a No Obligation Level 3 processing rate review/analysis to see what type of impact this will have on your business.

Give us a call at 888 790 3450