Unexpected Findings How Level 3 Reduces Your Cost for Processing Business Transactions
By the time you finish reading this, you ll be three minutes closer to lowering your Visa and Mastercard rates and fees.
Welcome Great businesses relentlessly look for new ways to exceed their customer s expectations. Quite often new opportunities are uncovered by systematically eliminating waste from their company s key processes. This booklet is designed to give you an introduction to Level 3 processing one of the most overlooked credit card processing programs for large business and government transactions. By providing more line item details about your sales, you can reduce your cost through better interchange qualification. At Tandem, we make it our mission to help you understand how merchant processing works and find the right solution for your business. Our #1 goal is to partner with you so that you can work smarter, more efficiently, and with more time to focus on revenue growth. We wish you great success!
The entrepreneur always searches for change, responds to it, and exploits it as an opportunity. Peter F. Drucker
Level 3 Credit Card Processing The difference between Level 1, Level 2 and Level 3 processing is pretty simple. While the size of the transaction does play a role, in general, Visa and MasterCard provide better interchange reimbursement fees when you provide more details about the sale. Level 1 processing is mostly used for business-toconsumer transactions. Very little information is required, with just merchant s name, transaction amount and date needed. This is where you will also find the highest interchange rates, up to 3.25%. A virtual terminal, where you can enter credit card and payment information online, opens you up to Level 2 and Level 3 processing. This is more for businessto-business payment processing. You can significantly reduce interchange costs. Unlike Level 1, where only cardholder data is captured, Level 2 requires you to input merchant codes and tax information. Level 3, meanwhile, provides line item details, such as item description, quantity and product codes, and shipping and freight costs. For credit transactions more than $5,000, Level 3 large ticket processing can provide you additional savings. Turn the page to learn more.
CHA-CHING. With various data rates and large ticket interchange categories, Level 3 Processing can save you as much as 1.45%.
Level 3 Processing Examples* Cost of a Visa Purchasing Card Transaction $25,000 Transaction Without Level 3 Data** (3.35% + $0.20) Level 3 Data entered (1.95% + $35.00) Government Purchasing Card Level 3 (1.45% + $35.00) Savings per transaction $837.70 $522.50 $397.50 $315.20 - $440.20 Cost of a MasterCard Transaction $25,000 Transaction Without Level 3 Data** (3.35% + $0.20) Level 3 Data entered (1.85% + $40.00) Savings per transaction $837.70 $502.50 $335.20 *Rates as of October 2013. **Your current rates without level 3 data could be higher or lower depending on how the card qualifies with MC or Visa plus any additional fees your processor charges.
Separating Fact from Fiction Myth: Enrollment in Level 3 is expensive. Fact: It won t cost you a penny. When Visa and MasterCard introduced the program a few years ago, there were startup costs, but they quickly realized it only served as a barrier for entry. Both financial services companies have done away with fees. It has been a free program since 2012. Myth: If I miss a step in Level 3 processing, I ve got an accounting nightmare on my hands. Fact: Not at all. Your transaction simply defaults to either Level 1 or Level 2, depending on how much data is entered. Myth: I have to spend more money on an advanced terminal. Fact: Not all processors are equipped to handle Level 3 processing. But with Tandem, you receive a free virtual/web-based terminal. It s that simple. Myth: My processor can change my interchange rate. Fact: Issuing banks, not processors, regulate interchange.
Different Levels of Data Data Element Level 1 Level 2 Level 3 Merchant Name Transaction Amount Transaction Date Total Tax Amount Customer Code Merchant Postal Code Tax Identification Merchant Minority Code Merchant State Code Item Product Code Item Description Item Quantity Item Unit of Measure Item Extended Amount Item Net/Gross Indicator Item Tax Amount Item Tax Rate Item Tax Identifier Item Discount Indicator Ship from Postal Code Freight Amount Duty Amount Destination Postal Code Dstination Country Code Alternate Tax Amount
First Steps We re not vendors; we re partners. That s what the name Tandem is all about. Relationships are the linchpin to our company s success and why we work in partnership with our customers to help them navigate the often-murky waters of credit card payment processing. Tandem is committed to a higher standard of professionalism and personal integrity. That s why we became one of the first companies to employ ETA Certified Payment Professionals (CPP). The CPP credential is the standard for professional performance in the payment industry. In 2013, Tandem became the first electronic transactional processing company to earn the Better Business Bureau Integrity Award for Marketplace Ethics. While credit and debit card processing is essential to doing business, the cost of it does not have to be a fuzzy number on your monthly statement. At Tandem, we make it our mission to help you understand how merchant processing works and find the right solution for your business. We are a privately held company with offices in Greenville, SC, Charleston, SC, Greensboro, NC, Fernandina Beach, FL and Mobile, AL.
One Source for all Your Payment Needs Credit Card Processing Debit Card Processing Ecommerce Gift and Loyalty Cards Purchase Card Processing Online Reporting Point-of-Sale Equipment Merchant Cash Advance
Together, A Better Way Forward. Tandem Innovative Payment Solutions Headquarters 728 N. Pleasantburg Drive, Suite 22 Greenville, SC 29607 864-672-1570 www.tandempayment.com Tandem is a registered ISO/MSP of Chase Paymentech Solutions, LLC Greenville, SC Charleston, SC Fernandina Beach, FL Greensboro, NC Mobile, AL