How to lower your costs on virtual cards and ghost cards using Level 3
/As a business owner or manager, you likely know that B2B (business-to-business) transactions often come with higher transaction fees, and the process can be slower than typical consumer transactions. However, have you heard of Level 3 processing? If not, it could be worth considering for your high-value B2B transactions. In this blog post, we'll explain what Level 3 processing is, who it's useful for, how it works, and how businesses can take advantage of it.
What is Level 3 Processing?
Level 3 processing is a type of credit card processing that requires more detailed transaction data to be submitted to the payment processor. It is often utilized in situations where the card is not present, but a virtual card, sometimes called a “ghost card”.
This additional data includes item descriptions, quantities, and prices, as well as tax amount, merchant name, and transaction date. This additional data is required to provide more transparency, reduce fraud, and streamline the transaction process for businesses.
Who is Level 3 Processing Useful For?
Level 3 processing is useful for businesses that frequently process high-value B2B transactions, such as wholesale distributors, government agencies, and large corporations. These businesses can benefit from lower transaction fees, faster processing times, and improved data reporting.
In What Context is Level 3 Processing Used?
Level 3 processing is used in B2B transactions where more detailed transaction data is required. This could include transactions involving large purchases of goods or services, such as construction materials, medical equipment, or office supplies. Government agencies, which often require detailed reporting and transparency, are also frequent users of Level 3 processing.
How Do Businesses Take Advantage of Level 3 Processing?
To take advantage of Level 3 processing, businesses need to ensure that their payment processing systems support this feature. Businesses may need to work with their payment processor or payment gateway provider to enable Level 3 processing.
Once enabled, businesses can provide more detailed transaction data to the payment processor, including item descriptions, quantities, and prices, and tax amount. This data will help the payment processor evaluate the transaction and determine if it is eligible for lower fees.
Using Level 3 processing can provide several benefits for your business, including:
Lower transaction fees: Because Level 3 processing provides more detailed information about the transaction, it is considered lower risk. As a result, payment processors may offer lower transaction fees for Level 3 transactions compared to standard credit card transactions.
Faster funding: Level 3 processing can speed up the funding process for high-value transactions. Because the additional data provided reduces the risk of fraud, payment processors may release funds more quickly than they would for standard transactions.
Increased transparency: By providing more detailed information about the transaction, Level 3 processing can increase transparency in B2B transactions.
Better data tracking: Level 3 processing provides more detailed data about transactions, which can be useful for tracking expenses, analyzing purchasing patterns, and making informed business decisions.
In Conclusion
If your business frequently processes high-value B2B transactions, Level 3 processing could be a valuable tool to consider. By providing more detailed data about transactions, Level 3 processing can help reduce the risk of fraud, lower transaction fees, speed up funding, increase transparency, and improve data tracking. To learn more about Level 3 processing and whether it's right for your business, contact your payment processing provider, or connect with us - we’d love to chat. 😀
