B2b Credit Card Processing: Level 3 Processing

When a credit card is swiped through a processing terminal or entered through an online payment gateway, the data that is processed and verified offers a certain amount of information regarding the transaction, depending on the level of the transaction. There are three basic levels of the credit card processing system, including Level 1, Level 2 and Level 3. Business-to-business, or B2B credit card processing, often provides extremely detailed data for more accurate business reporting. Read on to learn more about Level 3 and B2B credit card processing.

What Is Level 3 Processing?:
Level 3 processing is a type of B2B credit card processing that sends the most detailed data through the processing network. These transactions often involve government credit cards or corporate cards, which require heavy, accurate reporting in order to closely monitor business purchases. To qualify for Level 3 processing, the transaction data fields that are sent through the network include information such as item product code, item quantity, item tax amount, item tax rate, item discount indicator, freight amount, duty amount, postal codes and more, in addition to the basic information required for Level 1 and Level 2. Transmitting so much data requires special software that is well-equipped to process the detailed transactions.

Level 1 and Level 2 Processing:
While Level 3 processing requires more detailed transaction information, Level 1 processing involves B2C (business-to-consumer) purchases, which are made by consumers with their personal credit cards. These transactions transmit data fields that include the merchant name, transaction amount and date of purchase. Level 2 processing is a more basic B2B transaction that requires sales tax amount and customer codes.

The Benefits of B2B Credit Card Processing:
The additional data fields of Level 2 and Level 3 B2B credit card processing allows businesses, corporations and government agencies to closely monitor the types of purchases made by employees. The data also reveals how much is being spent and where the items are being purchased. Level 3 credit cards can limit transactions with certain restrictions, minimizing any inappropriate spending made with the company credit card. For example, a company can limit transactions that are not work-related, so that an employee can purchase office supplies but can't use the card to buy dinner for friends. Due to the amount of information required to qualify for Level 3 processing, these transactions come with a lower processing rate than Level 1 and Level 2. The lower rates, increased control and tracking capabilities are ideal for businesses, corporations and government agencies.