Level 2/3
Card payment processing is categorized into three levels: Level 1, Level 2, and Level 3. These levels vary based on the amount of payment information required. Level 1 requires the least information, generally resulting in higher interchange fees. Level 2 and Level 3 require more detailed data, which can lower interchange fees. While most businesses process at Level 1, fees can be reduced for merchants handling commercial credit cards by providing the additional data needed for Level 2 and Level 3 payments.
Card Processing Levels
- Level 1: Basic transaction details like the amount, date, and merchant’s name.
- Level 2: Includes additional data such as taxes, customer details, and merchant ZIP code. With Level 2, interchange costs are lower than with Level 1.
- Level 3: Contains the most detailed information, including line-item details, shipping addresses, and invoice numbers. With Level 3, interchange costs are lower than Level 1 or 2.
Eligibility Requirements
| LEVEL 2 | LEVEL 3 | |
|---|---|---|
| Merchant Requirements | ||
| Merchant Category Codes (MCC) | Refer to ineligible MCCs | |
| Annual transaction volume | 1-6M transactions | 20k-1M transactions |
| Payment Requirements | ||
| Card brands | Visa, Mastercard, and Amex | Visa and Mastercard |
| Card types | Business credit cards | Purchasing, corporate, and government credit cards |
| Sales tax | Visa: sales tax amount must be between 0.1% and 22% of the total payment amount Mastercard: sales tax amount must be between 0.1% and 30% of the total payment amount | No sales tax requirements |
Ineligible MCCs
The following MCCs are not eligible for Level 2 and 3 rates. If you are using Paydude hosted merchant application, you can customize the MCC options to prevent merchants from mistakenly selecting an ineligible MCC.
| MCC | DESCRIPTION |
|---|---|
| 3000-3299, 4511 | Airlines/Passenger Transport |
| 3351-3500, 7512 | Car Rentals/Auto Rental |
| 4411 | Cruise Lines |
| 5962, 5966, 5967 | High Risk Direct Marketing |
| 3501-4010, 7011 | Hotels/Lodging |
| 4112 | Passenger Railways |
| 5812, 5814 | Restaurants |
| 4722 | Travel Agents |
| 7513 | Truck and Utility Trailer Rentals |
Including Level 2/3 Data with a Payment
When collecting a payment using the Payment IntentsAPI, pass in the required attributes under the level3 field. Some data requirements do not appear in the API schema because Paydude automatically provides them on behalf of the merchant.
If you have questions about passing through Level 2/3 data, please reach out to support@paydude.io.
Data Requirements
The table below outlines the data required to qualify for level 2 and level 3 interchange rates, based on card brand requirements.
| DATA FIELD | LEVEL 1 | LEVEL 2 | LEVEL 3 |
|---|---|---|---|
| Card number | ✓ | ✓ | ✓ |
| Card expiration date | ✓ | ✓ | ✓ |
| CVV code | ✓ | ✓ | ✓ |
| Transaction amount | ✓ | ✓ | ✓ |
| Date | ✓ | ✓ | ✓ |
| Merchant’s name | ✓ | ✓ | ✓ |
| Merchant category code | ✓ | ✓ | ✓ |
| Customer reference number | ✗ | ✓ | ✓ |
| Sales tax amount | ✗ | ✓ | ✓ |
| Tax ID | ✗ | ✓ | ✓ |
| Merchant state code | ✗ | ✓ | ✓ |
| Merchant ZIP code | ✗ | ✓ | ✓ |
| Requestor name | ✗ | ✓ | ✓ |
| Destination address | ✗ | ✓ | ✓ |
| Destination state | ✗ | ✓ | ✓ |
| Invoice number | ✗ | ✗ | ✓ |
| Order number | ✗ | ✗ | ✓ |
| Duty amount | ✗ | ✗ | ✓ |
| Item ID or SKU | ✗ | ✗ | ✓ |
| Item description | ✗ | ✗ | ✓ |
| Item quantity | ✗ | ✗ | ✓ |
| Item unit of measure | ✗ | ✗ | ✓ |
| Item commodity code | ✗ | ✗ | ✓ |
| Freight amount | ✗ | ✗ | ✓ |
| Ship-from zip code | ✗ | ✗ | ✓ |
| Ship-to zip code | ✗ | ✗ | ✓ |
| Line discount | ✗ | ✗ | ✓ |