Level 2 Processing

The main difference between Level 2 and Level 3 data is detail captured. Level 2 data has basic transaction details like customer ID, and tax amounts, while Level 3 data offers more details, incorporating line-item details like product descriptions, quantities, and individual item costs.

This level of data is often sufficient for lower-risk transactions, but it lacks the comprehensive detail that Level 3 data offers. Therefore, while both levels serve specific purposes, Level 3 data processing is essential for organizations looking to maximize efficiencies in payment processing and expense management.

To qualify for Level 2 processing, merchants must provide specific data at the time of the transaction, such as the tax amount, customer code, and a purchase order number. Merchants must also ensure that their B2B payment software is capable of capturing and transmitting this additional data to the payment processor.

Additionally, businesses must adhere to their payment processor’s guidelines for Level 2 invoice processing, which may include specific formatting and reporting standards. Compliance with these requirements is essential to avoid potential issues with transaction approval and to maximize the benefits of using Level 2 processing.

Using Level 2 processing offers several benefits for businesses, particularly in terms of cost savings. Using tools like an interchange fee optimizer, which transmits transactional metadata enabling companies to qualify for reduced interchange rates and lower processing fees.

This is especially advantageous for B2B transactions, where larger amounts are involved, potentially saving up to 1% less in interchange fees per transaction.By providing additional transaction data, companies can often qualify for lower interchange rates, resulting in reduced processing fees. This is particularly advantageous for B2B transactions, where larger amounts are involved.