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How Level 2 Credit Card Data Impacts Interchange Fees

How Level 2 Credit Card Data Impacts Interchange Fees
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Processing a credit card starts a chain reaction of communication. Your Merchant Account Provider sends the transaction info to the card association network via its processor (aka the technical glue that handles the transmission of transactions). Then, the card network reviews the transaction info and responds with an approval or denial, which is communicated back to the provider to complete the transaction. This all happens in a matter of seconds.

Along with the credit card info and transaction amount, other information is relayed to determine the true cost of the transaction, also known as Interchange. There are three levels of processing, each requiring certain data for verification. Each card brand (Visa, MasterCard, Discover and Amex) has its own unique requirements, but there are also general ones across each processing level. The rule of thumb? The more data provided, the lower the Interchange cost.

Level 1 data constitutes business-to-consumer (B2C) transactions. As you would expect, level 1 requires minimal data including the business name on the card, the credit card number, the transaction amount and date. Level 2 requires more data and level 3 requires enhanced data. This article will focus solely on level 2 credit card data requirements.

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Level 2 Credit Card Data Requirements

Business-to-business (B2B) transactions require level 2 credit card data because of the type of card processed (a corporate card). Qualifying for B2B Interchange fees typically requires the following data:

  • All level 1 data requirements: Business name on the card, credit card number, transaction amount and date
  • Address and ZIP code: The Address Verification System (AVS) will verify whether the provided address and ZIP code match the bank records. Both the address and ZIP code must match.
  • Tax amount: This must be entered separately from the transaction total.
  • Purchase order: This refers to the agreement to deliver the products or services at a specific price per the business’ terms and conditions.
  • Business ZIP Code: The ZIP code for the business processing the transaction.

If you omit any of this information, these transactions will downgrade. Downgrades occur when transactions are reclassified to higher rate tiers, resulting in more expensive transactional costs. Luckily, downgrades can be avoided as long as you collect all the necessary information to qualify for B2B Interchange costs.

Collecting Level 2 Credit Card Data

The software and equipment you use to process credit cards affects how this information is collected. Relying on old-school terminals is risky. Software on these terminals isn’t always up to date, so they may not be configured properly to collect level 2 credit card data.

Partnering with a provider that has smart technology is the best way to capture level 2 data. PayJunction offers both a Virtual Terminal and a Smart Terminal to capture all level 2 credit card data and ensure the lowest Interchange rates for our B2B customers.

When a transaction is run, all level 1 data is automatically captured. We configure every merchant account to meet our customers’ needs. For our B2B customers, AVS settings can be required to match both the address and ZIP code. There are fields for entering a purchase order number and a tax amount, separate from the transaction total. Our system guarantees you receive the Interchange rates your business is entitled to.

Are you paying true Interchange?


Are you primarily processing B2B transactions? Were you aware of these level 2 credit card data requirements? Start a conversation below!

About Author
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Ursula Librizzi

Ursula is the sales and marketing operations manager for PayJunction. She oversees daily marketing tasks and liaises between the sales and marketing departments.

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