In the continuous advancement of technology and the role it plays in the business industry, it is becoming increasingly important to accept credit card payments, especially in B2B transactions.
Money transfers and paper checks are still a possible means of payment but more companies now prefer credit card transactions. Payments made through credit cards provide users a level of security and convenience that other types of payment may not offer. More than that, credit card payments can also be advantageous to merchants. Studies show that clients who use credit cards tend to spend more compared to other types of buyers. Providing the customers an option to use credit cards can help boost the sales of a business and increase cash flow. Although, being able to answer the question, “what is level 2 data?” can aid businesses to save more money when it comes to their processing fees.
Most B2B merchants are concerned with the amount they have to pay when it comes to interchange fees. Usually, entrepreneurs end up paying conspicuous amounts. Sometimes they are simply confused with the charge amounts. But more often than not, it’s because they haven’t created a Level 2 processing fee for their businesses.
What is Level 2 data?
Businesses that accept credit card payments need to pay interchange fees. These rates are made by credit card companies which may increase or decrease. The transaction type is another determining factor of how much a merchant needs to pay. This concern often leads to some form of confusion on the part of the merchants for they find it difficult to understand the amount that must be paid. Interchange rates are key elements in business if they are accepting credit card payments. If a merchant qualifies for a B2B interchange rate, they can save money from paying processing fees.
Level 2 data or enhanced data demand additional information in every transaction before a merchant can qualify for a B2B interchange rate fee.
In level 1, all the merchant needs to provide are the credit card number, start date, expiration date, CVV2 code, and ZIP code. While on Level 2, which is under the B2B transactions, there is additional information needed other than those asked from level 1. In level 2, additional information such as purchase ID, purchase ID format, sales tax, and sales tax indicator.
What distinguishes rates from fees?
In entering a contract with a processing company that deals with credit cards, merchants pay two different costs which are fees and rates. Fees are the amount you need to pay the processor so they will maintain your account. On the other hand, rates are the amount paid for every transaction.
The rates of credit card processing are typically divided into either one or two parts: the discounted rate alone or a discounted rate together with the fee for every transaction.
Providing more information may seem challenging. However, it can be made easier by making the right choices. When you decide on the provider that will meet your company’s needs for your B2B credit card processing, all these concerns can be handled easily for you. Discount rates pertain to the percentage in every transaction.
No matter what the purchase cost, the fee for every transaction remains every time a customer completes a transaction credit card.
As a merchant, you’ll need to understand the different pricing models and which rates are open for negotiation.
Discount rates and transaction fees are made up of interchange fees and assessment fees. Interchange fees may change and are determined by the type of credit card your client uses. It accounts for a huge percentage of the discounted rates. The interchange fee is a non-negotiable amount. The card brands dictate the amount to be paid and all processors pay a similar amount. The rates for every card brand could be seen through their websites.
Like interchange fees, assessment fees are another example of non-negotiable costs which card brands decide on. There is a variation of when it comes to these rates which rely on the card brand your clients prefer. The assessment fees could involve Network Acquirer Processing Fee (APF) of Visa, Network Access and Brand Usage (NABU) of Mastercard, and the Data Usage fee of Discover.
The only negotiable amount found in the discount rate is the processor’s markup. The amount of the markup does not depend on the card brand but rather, it is determined by the credit card company that completes the transaction process.
How does Level 2 data help save your business money?
Providing a credit card option payment to your clients allows you to reach more possible clients. Moreover, it allows you to have a competitive edge over clients who prefer to make online purchases.
Ecommerce platforms also utilize the most advanced technology that helps merchants automize the way they sell. Tasks that typically take a person several minutes to a few hours to conduct, may be efficiently accomplished by the software provided in eCommerce platforms. Having your sales team focus on more important matters of the business will direct their attention to business initiatives that will generate more revenue.
Through an eCommerce platform, you get to operate round the clock. Your clients are not restricted within your operating hours. Time zones and availability would not matter. Customers can make a purchase at any given time of the day or when it is most convenient in their schedule.
Having level 2 data in your business significantly decreases the possibility of error. Manually accomplished transactions are vulnerable to human errors. Such errors may cause a percentage of your profit lost. Digital footprints of transactions in your business are far more reliable than a paper trail. You could easily access vital information and have it stored in a cloud.
Payline Data’s software allows you to automatically receive Level 2 and Level 3 data rates for qualifying MasterCard and Visa transactions without having to enter any additional information. Our software has a series of defaults within its algorithm that meets the requirements set by MasterCard and Visa to receive discounted Level 2 and Level 3 data rates. This will save you 0.2%-0.9% per transaction!