Level 3 processing is a specialized form of credit card transaction. Instead of just the basic data, it requires a deeper dive into the transaction's details. Typically used for situations where the card isn't physically present (think "virtual" or "ghost cards"), it asks for specifics like item descriptions, quantities, prices, the tax amount, merchant's name, and the transaction date.
The goal? More transparency for each transaction, which helps in reducing fraud and making the entire process more streamlined for businesses.
Level 3 processing is useful for businesses that frequently process high-value B2B transactions, such as wholesale distributors, government agencies, and large corporations. These businesses can benefit from lower transaction fees, faster processing times, and improved data reporting.
Level 3 processing is used in B2B transactions where more detailed transaction data is required. This could include transactions involving large purchases of goods or services, such as construction materials, medical equipment, or office supplies. Government agencies, which often require detailed reporting and transparency, are also frequent users of Level 3 processing.
To take advantage of Level 3 processing, businesses need to ensure that their payment processing systems support this feature. Businesses may need to work with their payment processor or payment gateway provider to enable Level 3 processing.
Once enabled, businesses can provide more detailed transaction data to the payment processor, including item descriptions, quantities, and prices, and tax amount. This data will help the payment processor evaluate the transaction and determine if it is eligible for lower fees.
If B2B transactions are a big part of your world, Level 3 processing might just be the tool you didn't know you needed. It's all about boosting transparency, saving some cash, and getting insights from your data.
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