If you currently accept credit and debit cards within your business, you probably have Level 1 payment processing — the kind normally associated with standard consumer plastic.
However, payment processing can go as high as Level 3 (also known as Level III). Depending on your business and the types of businesses you serve, accepting Level 3 transactions may be a viable option for you.
What is Level 3 processing, and how can it benefit you?
Level 3 Payment Processing Defined
When verifying and authorizing purchases made with Level I payments, processors require a limited amount of data. In most cases, you only need the merchant name, date and transaction amount for the payment to go through.
However, with Level III payments, a lot more information is required, including:
- Destination postal codes
- Tax amounts
- Freight amounts
- Invoice numbers
- Item descriptions
- Item product codes
- Item quantities
- Ship from postal codes
[You can see the full list of Level III requirements here.]
How Level 3 Payment Processing Helps Buyers and Sellers
As mentioned above, Level 3 processing provides superior reporting, with each transaction requiring a minimum of 15-20 “line item” details. Still, it's possible to create as many as 100 customized fields.
This level of reporting provides buyers with much greater control. Corporate and governmental clients can more easily monitor internal spending and track the transaction from inception to settlement.
Level 3 also allows accountholders to place certain restrictions on whatever cards they issue to employees. Common limitations include daily spending quotas or merchant-specific whitelists and blacklists.
It's easy to see how Level 3 processing benefits the buyer, but as an enterprise business that sells products and services to others, why would you ever consider this payment option?
There are three primary reasons:
1. Lower Processing Fees
Level 3 payment processing qualifies for lower interchange rates than Levels 1 or 2. Because there is less overall fraud with this higher payment level, the card brands can afford to charge lower interchange rates.
2. Faster Account Settlements
Level 3 payments usually happen more quickly, which can be a huge asset if cash flow is a concern.
3. More Sales and Customers
Many corporations and government agencies only buy using Level 3 or corporate purchasing cards. By upgrading your payment infrastructure, you'll be able to tap into a much larger pool of customers. This is especially enticing given the volume, frequency and prices normally associated with the B2B and B2G purchasers.
Is Level 3 Payment Processing Right for You?
If you work with an enterprise business and don't currently offer Level 3 payment options to your customers, you’re missing out on tremendous profit potential — both in terms of reduced costs and increased sales.
Level 3 isn’t for everyone, but given the benefits, it’s worth exploring your options — especially since doing so is absolutely free.
To learn more about BluePay’s PCI-compliant Level 3 solutions, schedule an appointment with our payment security team today.