Level 3 Processing

What is Level 3 Processing?

Government and Corporate purchasing cards can be processed with the same level of detail normally associated with an itemized invoice.  This is known as level 3 line-item transaction data. 

When level 3 technology is in place, a merchant can submit electronically to a government buyer complete transaction detail.  This can automatically be entered into its accounting system and reviewed each day, thus providing for greater financial accountability. 

To encourage merchant participation and support of purchasing card programs, Visa and MasterCard have created special interchange rates to reduce a merchant’s transaction costs whenever level 3 line-item detail is transmitted with the financial settlement.

In providing level 3 data, a merchant can substantially reduce their credit card processing  fees – sometimes by up to 40%.  This savings is available for any size purchasing card ticket.  However, this savings can be further increased for contractors that process large tickets, by enrolling in the Purchasing Card Large Ticket Program.

Solutions overview

How can I obtain the lower interchange?

Sophisticated virtual terminal technology is now available that makes processing a level 3 transaction much simpler and faster than in the past.

Some of the features associated with this new technology include the ability to do recurring billing; accept payment by electronic check; automated online invoicing; shopping cart integration; and integration with a merchant’s accounting system.

The detailed real-time reporting tools available with the virtual terminal are especially useful for businesses that want to be able to closely monitor their transaction activity.

Visa and MasterCard have formulated regulations designed to reduce fraud.  Many businesses are not in compliance with these regulations, especially with regard to storage of cardholder data.  Processing with the new virtual terminal technology insures that data is securely stored offsite and that the business is in PCI (Payment Card Industry) compliance.

In summary, incorporating level 3 technology can greatly simplify workflow and operations for the government contractor, while reducing their costs substantially, even to the point of offsetting the Industrial Funding Fee (IFF) or more.

Click here to contact Financial Transaction Services for a Free Business Needs Analysis today.

 

Advantages

  • Lower Interchange Costs.
  • More detail for your larger customers.
  • Savings of up to 40% off credit card processing fees.

Resources