What You Should Know About Level 3 Payment Processing

Mar 20, 2017

Credit card processing methods can be characterized by the following levels: Level 1, Level 2, and Level 3. These levels differ from each other based on how much information is required to complete a payment.

3 Levels of Payment Processing

Level 1 processing requires the least for payment authorization. Level 1 credit card processing is required for Business to Consumer (B2C) companies. The majority of companies use Level 1 when processing standard consumer credit cards offered by Visa, MasterCard, and American Express.

Business to businesses (B2B) companies, especially those interacting with small to medium-sized businesses, need Level 2 payment processing.

Level 3 processing is a set of specific additional line-item detail data such as item descriptions, quantities, tax detail, etc. along with the required standard transaction info such as account #, exp. date, and more. The importance of this type of information lies in the fact that the interchange fees borne by the merchant as part of the transaction fees they pay are significantly lowered.

Level 3 can be more secure, but you should you invest in PCI-compliant payment processing. Turn to emerchantbroker.com, the #1 provider of high risk payment processing in the US, to get ultimate protection for your business. EMB is rated A+ by the BBB and A by Card Payment Options, and is one of Inc. 500’s Fastest Growing Companies of 2016.

Level 3 Payment Processing

Level 3 processing is required by the so-called “Large Ticket Interchange” or LTI, a special interchange category. This refers to larger transactions that occur in the B2B and B2G fields.

In the case of Level 3 credit card processing, the capture of specific line item data is required for all transactions. These are typically some 15-20 fields, but the number depends on the client and can reach 100.

Common line item details for Level 3 credit card processing include:

  • Commodity codes
  • Product codes
  • Item descriptions
  • Merchant contact info
  • Tax amounts
  • Freight amounts
  • Quantities and units

Benefits for merchants include the following:

  • Being able to attract a specific type of clientele
  • Benefiting from faster account settlements
  • Being able to pay lower interchange fees by accepting Level 3 credit transactions

To submit Level 3 data, you should use specialized payment software that can be accessed via a secure website application. The payment platform received the data through the integration with a merchant’s ERP (Enterprise Resource Planning) system.

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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