A Must Read for Merchants Who Accept Corporate and Business Cards

Level 2 rate increase chart concept written on a chalkboard

Level 2 Rates Are About to Cost You A lot More

All merchants are consistently weighing their options when accepting cards because of the cost of card acceptance and how much that eats into the profit of a sale.

Does this need to be the case? Not really. Most merchants do not understand that business and corporate cards can actually cost less than normal credit cards if you have the right card processing technology.

Every business that accepts payment by credit or debit cards, pays interchange rates. Every card is assigned to an interchange category. The categories are set by credit card brands, like Visa and Mastercard, and are updated every 6 months (every April and October). These rate schedules address all types of cards (consumer, commercial, government) and sometimes vary in the prices going up or down.

October 2017 – Level 2 Interchange Rate Increase

Visa has announced that it will increase some business and corporate card rates by 0.50%. That is a dramatic increase that will impact any merchant who accepts corporate cards. What businesses don’t realize is that you can avoid this rate increase. If your business has the right processing equipment, you can bypass the rate hike and actually lower the card cost by qualifying for Level 3 interchange rates.

To qualify for better B2B interchange rates, merchants must make minor adjustments to the way they accept cards.  There is no obligation to submit this enhanced data, but depending on the volume of qualified Level 3 transactions you accept, CardFellow.com estimates you could save up to 1.15%.

Given the potential savings, why don’t more B2B businesses submit this data? There are a few reasons. One common reason is that some merchants are using payment processors who don’t have the necessary experience in managing B2B credit card payments. Sometimes an integrated processing solution becomes a barrier or employees do not have the proper training to enter the increased amount of data. There can be many environments that don’t support Level 3 transactions which can mean that some B2B merchants pay too much for card processing. 

Act Now to Reduce Your Rates

Level 2 data used to help merchants save money but the recently announced increase by the card brands puts an even greater emphasis on a business’ ability to provide enhanced data. Minimizing unnecessary credit card processing fees is imperative for increasing profits, but not enough businesses realize the savings that they could be making by including the additional Level 3 data.

To get a clearer picture of the possible savings you could make, check your statements to see how many Level 2 and Level 3 payments your company accepts or speak to your payment processor to obtain this information. This will help you determine if a Level 3 capable solution would be worthwhile for your business.

Find Out If You Qualify for Level 3 Rates

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