Level 3 Processing

It saves merchants in cost because in a B2B transaction, card networks have more information about both parties, which lessens the threat of fraud. The additional information that the card networks have includes what was purchased, where the purchase was made, and how much was spent, along with more than ten other data fields. Because of these extra “line item details,” card networks can offer much lower interchange rates for level 3 processing.

To qualify for level 3 processing, a merchant must accept certain payment methods issued by Visa or MasterCard. These methods include purchasing cards, corporate cards, or government spending accounts, and level 3 processing can only be used with these methods of payment. For example, even if you accept level 3 processing, that doesn’t mean that every transaction you process will have the level 3 interchange rate—just that when you process those specific payment methods, you will have the level 3 interchange rate.

Level 3 Interchange Rates

Visa has two categories for Level 3 processing fees: commercial and government spending account. They are as follows:

  • Commercial level 3 fee program as of 04/13/2019: 1.90%+ $0.10
  • Government spending account program as of 04/13/2019: 1.20% + $39.00


Mastercard has one category for Level 3 processing: Large Market Credit. The rate for this program as of 04/12/2019 is 1.90% + $0.10.

Card Eligibility

Not all cards are eligible for level 3 processing. Generally, business cards used by small businesses are not supported by level 3 processing, only corporate and purchasing cards belonging to governments or large businesses qualify. Since you can’t know just from looking at card whether it is eligible for level 3 processing or not it is more prudent to enter all of the information required for level 3 processing anyway, because while submitting irrelevant information can’t hurt you, not submitting potentially relevant information can hurt you in the form of not qualifying for the lower interchange rates.

Visa Requirements

Sales Tax Amount Sales Tax Indicator Customer Code
Purchase ID Purchase ID Format Ship to/from ZIP Code
Destination Country Code VAT Invoice Reference Number VAT Tax Amount/Rate
Discount Amount Freight/Shipping Amount Duty Amount
Order Date Item Description Item quantity
Item Unit of Measure Item total Item Commodity Code
Item Product Code Item Unit Cost Item VAT Tax Amount/Rate

American Express Requirements

Date Supplier Name/Merchant ID Number Dollar Amount
ZIP Code and Street Address Order number, cost center or accounting code, or employee name, or sample number (as in the case of providers of laboratory testing services) Client Defined Variable Data Field (“Cardmember Reference Field”) – limited to 17 characters
Sales Tax Tax ID Number (TIN) Minority, Women-Owned, and Small Business status
Ship-to Zip Code Supplier Reference Number – order or invoice number (used for reconciliation) 4×40 free-form field
Item description Unit price Quantity
Freight/handling Asset Number SKU
Split shipments/shipment number Total meter count Service credits
Tax Type Code Supplier Reference Code

Mastercard Requirements

Tax Amount Tax Indicator
Item Quantity Description
Customer Code Unit of Measure
Tax ID Extended Item Amount
Product Code Debit or Credit Indicator