Every day, merchants work to control costs while delivering high-quality products, services, and support. Level II and III transaction processing is one way merchants can save, while creating a value-add for prospects and customers.
If you accept Business-to-Business (B2B) and/or Business-to-Government (B2G) payments, including Level II and III data can help you significantly reduce processing fees. Level II and III data provide varying levels of information about the purchase, similar to what is included on an invoice. While the requirements are a bit more complex, the cost savings can make the effort worthwhile.
What is a Purchase Card?
Purchase cards (also called P-Cards) are a special type of commercial charge card. Used as an alternative to paper-based purchase orders and/or check requests, they can be more efficient and cost-effective. MasterCard defines a purchase card as: Designed to help companies maintain control of purchases while reducing the administrative cost associated with authorizing, tracking, paying, and reconciling those purchases.
Government and large organizations use purchase cards to support B2B and B2G transaction processing. Authorized employees use the cards to place orders and make purchases directly with merchants.
To qualify transactions for the best rates, you must include specific data, including:
Level II data: Order Number, Tax Amount, and Ship to Zip
Level III data: Order Number, Tax Amount, Ship to Zip, and line-item detailed order information such as, purchase order number, product code, and description.
(Note: Required elements can vary based on card association.)
Merchant (Seller) benefits of accepting purchase cards include:
- Reduced interchange fees. Card Brands see lower risk associated with B2B or B2G transactions because of lower potential for fraud, chargebacks, etc. and therefore charge lower rates for qualifying Level II and III transactions.
- Receive funds more quickly than paper-based methods.
- Increase value to your existing business customers by providing more transaction level details.
- Create an advantage for gaining new, large clients who rely on this type of service.
How do purchasers benefit from purchase cards?
- Similar to an invoice, Level III line-item data provides detail that help the purchaser (card holder) identify items that were purchased and provide information about the order as a whole. This data is passed on to the card holder so that it may be easier to reconcile the transaction.
- Detailed reporting allows for easier reconciliation.
- Businesses can use line-item detail to keep track of all purchases made by employees on the corporate credit card.
How to Accept Level III Transaction Detail
Level II and III transactions can be Card Present, Card Not Present and E-Commerce. With TrustCommerce, you can accept Level II and III transaction detail via the following products:
- TC Vault Virtual Terminal
- TC Link API
- TC Batch
- TC Trustee API
TrustCommerce supports Level II and III transaction processing on multiple processing platforms. In addition, you will want to check with your Merchant Acquirer to ensure you are enabled for Level II and III. Be aware that while all Issuers support the same fields, the data elements may change from merchant bank to merchant bank. Check with your merchant bank for the correct data-element required fields as well as any industry-specific requirements.
There is a perception that setting up and accepting Level III transactions is difficult and time-consuming. Some of the complexity lies in accurately processing the correct data in order to qualify for the best rates. Here are some tips for making it more efficient and improving qualification.
- Program default fields within the TrustCommerce Virtual Terminal. This can streamline Point of Sale (POS) data entry, save time, and reduce data entry errors.
- Merchants and software integrators can consider programming default fields when setting up the TC Link API.
- Check with your merchant bank to ensure you are passing the correct field data.
- Take time to train employees effectively.