If you’re accepting credit cards in B2B transactions, you’ve probably heard the terms Business Card, Corporate Card and Purchasing Card. All of these are serving a similar purpose, they have some differences which ultimately come down to the liability for purchases made with that card. What all three of these card types have in common is that they are handled on a different set of rules involving what is called “enhanced data” and unless you’re equipped to capture the required information — you’re overpaying for fees every time someone calls and gives you their card number.
What is Enhanced Data?
Enhanced data is pertains to B2B and Government transactions and aids large companies track expense through the collection of additional information. When that data is transmitted, the merchant receives a significantly reduced interchange cost. This can be referred to as “data level” by Visa or “data rate” by MasterCard and ultimately translates into the amount of information that has been provided with a transaction. There are three levels of data associated with card processing. Level 1 is a basic transaction processed with the least amount of data, Level 2 requires a slight bit more and Level 3 is more than that.
The higher the data rate number, the lower the interchange cost is charged for that transaction. That means, if you’re on a cost-plus pricing structure for your credit card fees — the more data you transmit, the more you save.
Moreover, the gateway you use to process card transactions matters. For example, Authorize.net doesn’t have the same level of functionality as the PayTrace gateway, which inherently knows which cards qualify for Level II and Level III interchange savings
What Card Brands Use Enhanced Data?
Visa, MasterCard have programs for both Level 2 and Level 3 data, while AMEX only offers Level 2, currently. Discover does not offer any enhanced data programs.
To receive a Level 2 or 3 data rate, you must provide and transmit additional data regarding that particular transaction.
Requirements & Eligibility for Enhanced Data Rates
Cards classified as “commercial cards” (Business, Corporate and Purchasing cards) are all eligible for Level 2 and Level 3 data rates, but will process at Level 1 rates if all the required data is not transmitted with the transaction. All “consumer cards” (Those not associated with a business, i.e., personal cards) are only eligible to process at Level 1 data rates.
The specific requirements for information are subject to change, but contain some standard elements your merchant processor can help you configure. Along with these items, there are other criteria which may apply such as MCC code, settlement time and others.
So How Do You Send Enhanced Data?
Enhanced data is captured and transmitted in your card-not-present transaction to receive Level 2 and Level 3 rates, but how does it get sent? Your payment gateway is responsible for sending data on a transaction, but not all of them support Level 2 and Level 3 data rates. Some payment gateways and virtual terminals allow you to pre-configure them to submit this information and streamline your process so things move a lot more efficiently.
Is Enhanced Data Submission Required?
Short answer: No.
However, If you run a lot of business credit cards, it’s going to be in your best interest to do so. If you don’t handle enhanced data, your transactions will “downgrade”. Any time that a transaction receives a “downgrade”, you are paying more money in interchange than what you have to.
What’s The Savings?
Here’s where it can get tricky — because of the nature of interchange, there are so many card types and so many tables that it’s difficult to nail down an exact dollar figure. The easiest way to get an estimate is to work with a credit card processing company that is familiar with Level 2 and Level 3 data and ask them to run an analysis on an average card processing statement (or a few) so that you can see what potential savings you could receive by processing Level 2 and Level 3 data rate transactions.
Ask your current merchant services provider if they have the ability to pass on savings from Level II and Level III data — if they give you a blank stare or sidestep the question, it might be time to shop around for another service provider to see what you might be missing out on.
