Level 2 and Level 3 Data: How B2B Merchants Cut Interchange Costs

By RatesNegotiator Team

Businesses that accept corporate, purchasing, or government cards can qualify for significantly lower interchange rates by submitting additional transaction detail known as Level 2 and Level 3 data. Level 1 includes only basic information such as the card number and amount. Level 2 adds sales tax and customer or purchase order codes. Level 3 adds full line-item detail including item descriptions, quantities, unit prices, and commodity codes. When this data is present and valid, eligible commercial cards drop to lower-cost interchange categories.

This article explains how card data levels work, how much B2B and government-facing merchants can save, and why many businesses never qualify because their processor or software is not configured to transmit the required fields.

How to Capture the Savings

Three conditions must be met to qualify for Level 2 and Level 3 interchange rates. The processor must support the data, the point-of-sale or invoicing software must capture tax amounts, purchase order numbers, and line-item detail, and the data must be accurate and complete. If any element is missing, eligible business and purchasing cards downgrade to standard interchange and the merchant pays the higher rate. Reviewing a statement for commercial cards landing in high-cost or non-qualified categories is a strong indicator that Level 2 and Level 3 processing is not enabled. For B2B sellers, wholesalers, professional services, and government suppliers, enabling this data can be one of the largest available savings on the interchange portion of their costs.