What Is Level 2 and Level 3 Credit Card Processing Data?

Level 2 and Level 3 credit card processing data are the extra transaction details you send with a commercial card sale so the card networks charge you a lower interchange rate. Submitting this data can trim roughly 0.40% to 1.50% off the fee on each qualifying sale compared with standard processing. Level 1 is what runs on a typical consumer purchase: card number, expiration, amount. Level 2 adds a few fields the buyer’s company uses for tracking. Level 3 attaches an itemized invoice to the payment itself. The savings only apply when the card is a commercial, corporate, purchasing, or government product, but on those cards the difference is real money.

How Enhanced Data Changes Your Interchange Rate

Every card transaction carries an interchange fee paid by your bank to the cardholder’s bank. Visa and Mastercard publish separate rate schedules for transactions that arrive with enhanced data versus those that don’t. When a commercial card transaction lands without the required fields, the network reclassifies it into a more expensive non-qualified or standard category. That automatic reclassification is called a downgrade, and it quietly raises your cost on every affected sale.

Visa’s published schedule shows the gap plainly. A corporate or purchasing card that qualifies at Commercial Level II pays 2.50% plus $0.10 per transaction. The same card processed without the enhanced data falls to a Non-Qualified rate of 2.95% plus $0.10, a jump of 45 basis points. Visa business cards spread wider: Business Level II rates run 1.90% to 2.25% plus $0.10 depending on spend tier, while the Non-Qualified rate sits at 3.15% plus $0.20, a gap of 90 to 125 basis points.¹

On a $10,000 purchase order, a 45-basis-point downgrade on a corporate card costs $45 in avoidable fees. Multiply that across a year of B2B volume and the cumulative savings from qualifying at Level 2 or Level 3 easily run into the thousands.

What Level 2 Requires

Level 2 sits one step above basic processing. You still capture the card number, expiration date, and amount, then add a small set of fields that give the network and the cardholder’s company more visibility into the purchase. Visa and Mastercard requirements overlap heavily, with a few differences at the edges.

The core Level 2 fields are:

Sales tax amount, stated exactly. For tax-exempt sales you submit a zero amount along with a tax-exempt indicator rather than leaving the field blank.
Customer reference number, a code the cardholder’s organization uses to track the purchase internally, often a purchase order number or cost center code. This field is mandatory for both Visa and Mastercard.²
Merchant postal code, the zip code of your business location.

Mastercard also requires an invoice number and a merchant purchase reference that Visa treats as optional.² Most gateways surface all these fields regardless of network, so filling them in on every commercial card sale is the safest way to avoid downgrades.

What Level 3 Adds

Level 3 goes well beyond Level 2 by requiring line-item detail for every product or service in the order. It is what makes commercial card transactions useful for government procurement and large corporate purchasing programs, where auditing and reconciliation depend on knowing exactly what was bought.

Line-Item Fields

For each item in the order you supply at minimum the item description, quantity, and unit price. Mastercard’s gateway documentation is explicit: if you submit any line-item data at all, those three fields are required.³ The full field set also includes:

Commodity code, a standardized numeric identifier for the type of goods or services. Most processors expect codes from the United Nations Standard Products and Services Code (UNSPSC), an eight-digit system that organizes products into segments, families, classes, and specific commodities.³
Unit of measure, indicating how the item is counted, such as “each,” “pound,” or “hour.” Your acquirer may require values from a specific enumeration list.³
Discount amount at the line-item level, in exact dollars.³
Extended item amount, the unit price multiplied by the quantity.
Product code, a merchant-defined code for internal tracking, separate from the commodity code.

Freight, Duty, and Tax-Exempt Sales

Visa’s Level 3 requirements also call for freight and duty as separate summary-level fields. Shipping charges get their own field rather than being rolled into a line item, and any import duty or customs fee is broken out the same way. Origin and destination zip codes are required so the network can verify the shipping path.

Tax-exempt orders need particular care. Instead of leaving the tax field blank, you submit a zero-dollar tax amount paired with a tax-exempt indicator. Mastercard provides a dedicated tax status field for this, with values such as “EXEMPT” or “NOT_EXEMPT.”⁴ Setting the indicator correctly is what keeps a tax-exempt government purchase from downgrading over a missing tax amount.

Which Cards Actually Qualify

Your data entry only matters if the card being used supports enhanced processing. Standard consumer credit cards stay at Level 1 no matter what information you send. The cards that benefit from Level 2 and Level 3 rates are commercial products issued to businesses and government agencies: corporate cards, purchasing cards (often called P-cards), and fleet cards.

The network identifies eligible cards by the Bank Identification Number, the first six digits on the card. When the card is entered, the network reads the BIN, checks whether the account belongs to a commercial or government program, and looks for the enhanced fields. If the card is a consumer product, extra data you submit is simply ignored for interchange purposes.

Government Purchase Cards

Government purchase cards deserve special attention. They represent a large slice of B2B volume and almost always benefit from Level 3 data. The GSA SmartPay program covers federal agency purchasing and uses recognizable card prefixes. Mastercard SmartPay purchase cards start with 5565 or 5568; Visa SmartPay purchase cards start with 4614 or 4716. Fleet cards use additional prefixes including Voyager (7088) and Wright Express (6900 and 7071).⁵

Some gateways check the BIN against a database automatically and prompt for additional fields when a commercial or government card is detected. Where that feature is missing, training staff to recognize the common prefixes is the low-tech alternative.

Large-Ticket Programs Where Level 3 Pays Off Most

High-dollar transactions unlock interchange programs with far lower rates, but only when Level 3 data comes with them. Visa’s Straight Through Processing program uses tiered pricing that drops as the amount climbs. A transaction under $7,000 pays 2.00% plus $0.10; a transaction of $100,000 or more drops to 0.80% plus $35.00.¹

Visa’s Large Purchase Advantage program goes lower still for card-not-present sales above $10,000. Rates run from 0.70% plus $49.50 on transactions between $10,000 and $25,000 down to 0.40% plus $58.50 on transactions above $500,000.¹ Both programs require the full Level 3 line-item set, a customer code, and either a valid tax amount or a tax-exempt indicator. For businesses selling equipment, building materials, technology services, or anything else that routinely generates five- and six-figure invoices, this is where Level 3 pays for itself many times over.

Setting Up Your System to Submit the Data

Standard retail terminals rarely support the expanded fields Level 2 and Level 3 require. If you accept commercial cards with any regularity, you need a payment gateway with the enhanced fields built in, or a virtual terminal with a web interface where staff can enter line-item detail by hand.

The scalable approach is integrating your gateway with your accounting or inventory system. When your ERP or order management software maps product descriptions, commodity codes, quantities, and prices directly to the gateway’s data fields, Level 3 submissions happen automatically at checkout. That removes the manual entry bottleneck and cuts the formatting errors that trigger downgrades. Before paying for integration work, confirm that your processor and gateway actually support Level 2 and Level 3 submission. Not all do, and some support it only for specific acquirer relationships.

One boundary worth flagging: if staff will key card details and line items through a web-based virtual terminal, PCI DSS compliance rules apply to that workstation. The PCI Security Standards Council’s SAQ C-VT framework covers this setup, including requirements around the hosting provider, workstation isolation, firewalls, anti-virus, HTTPS transmission, role-based access, and a prohibition on storing card verification codes.⁶ These rules apply at any data level, but Level 3 tends to involve more manual handling, which enlarges the compliance surface.

Checking That Qualification Actually Worked

After transactions settle, your monthly processing statement shows which interchange category each sale landed in. Sales that qualified at Level 2 or Level 3 carry specific designation codes; downgraded sales appear under non-qualified or standard categories. Reviewing those designations is the only way to know your submission process is doing what you think it’s doing. A pattern of downgrades on commercial card sales almost always traces to a missing field, a blank tax indicator, or a formatting problem the gateway didn’t catch. Most processors can produce a downgrade report that flags exactly which transactions missed qualification and why, which turns troubleshooting into a straightforward fix.

1
Visa. Visa USA Interchange Reimbursement Fees
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Mastercard Developers. Level II/III Data for the First Data Acquirer
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Mastercard. Level 2 and 3 Data
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Mastercard Developers. Level 2 and 3 Data
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GSA SmartPay. Recognizing GSA SmartPay Cards and Accounts
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PCI Security Standards Council. PCI DSS Self-Assessment Questionnaire C-VT