Level 3 Credit Card Processing | CLARUS Merchant Services

Everything You Need to Know About Level 3 Credit Card Processing

June 12, 2019

Level 3 Credit Card Processing is probably one of the credit card processing industry’s best kept secrets. It is used with B2B (Business-to-Business) and B2G (Business-to-Government) transactions to help corporations monitor and track their spending by collecting a set of additional line-item details. Incentivizing merchants, by utilizing that extra data, this top tier of processing offers significantly lower interchange rates for Visa and MasterCard transactions.

This additional data is reported back to Visa and Mastercard, allowing businesses to keep track of, receive applicable sales tax detail, and set restrictions on purchases made with a company credit card. This allows any business to better stay on top of their spending, ensuring that their funds are best utilized to further their operations.

Most merchants will never have the opportunity to accept Level 3 cards, but if you’re processing in a B2B-heavy industry or if you accept a lot of Government cards, then having Level 3 data acceptance may help reduce your interchange costs significantly. Often times, Level 3 interchange rates are up to a full 1.00% lower than their standard counterparts!

The Advantages of Level 3 Credit Card Processing

The most important benefit for customers who buy with Level 3 credit cards is control. They allow organizations to more carefully track where money is going and why.


By requiring all of this extra information, they can more easily restrict things like:
• Who in the organization is allowed to buy
• How frequently the card may be used
• The size and dollar amount of each purchase

However, there are several benefits for the merchant:


• You attract a very different type of clientele — mainly higher spenders. Many government agencies only use Level 3 credit cards for major purchases.
• You also benefit from faster account settlements. With Level 3 processing, the Days Sales Outstanding (DSO) becomes shorter, allowing you to avoid unnecessary delays. This can be a huge advantage if cash flow is a concern.
• You pay lower interchange fees by accepting Level 3 credit transactions. Because of all of the extra information required, fraud becomes less likely, and you’ll be reward you for helping to reduce the risk of credit card abuse.

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