Upgrade your Merchant Account to Level 3
Purchasing cards (p-cards) are issued to large corporations and government agencies to support business-to-business and business-to-government credit card transactions. Purchasing cards possess more features, capabilities, and controls than standard consumer credit cards. P-card transactions are estimated to reach $185 Billion by 2010, up from $110 Billion in 2005. If your customers are implementing p-card programs to replace inefficient and expensive paper purchase order processes, then you need to think about upgrading your merchant account to Level 3 processing.
Government & Corporate Card Use
Think your business is too small to land a lucrative government contract? Think again. Almost a quarter of all federal prime contracts and 40 percent of all subcontracts go to small businesses. Consider that more than 350 federal entities participate in GSA's SmartPay programó using purchasing cards (p-cards) to make purchases of goods and services needed for their operations, spending more than $27 billion on over 90 million transactions in fiscal year 2007. P-cards allow them to make purchases more quickly and more conveniently than previously used methods of purchasing. Because of these benefits, more agencies are attempting to shift purchasing to vendors that accept cards. And card use by federal entities is expected to continue growing as they identify additional ways of using cards and implement new payment technologies.
Corporations and businesses are also aggressively adopting purchasing, corporate and business credit cards to reduce administrative expenses and identify opportunities for savings. A survey of almost 1,300 purchase card program administrators from corporations, nonprofits, and government entities found a $53 administrative cost savings per transaction compared to purchase orders.
Level 3 Merchant Account Benefits
For merchants, the benefits of accepting p-cards as payments include improving profitability by reducing payment time from 30-60 days to 2-3 days, reducing collection expenses and reducing the cost of floating funds until payments are received. Qualifying for Level 3 processing rates will reduce processing expensive over traditional retail and MOTO merchant processing. Having Level 3 capability will increase your competitiveness in winning new contracts and may even be a requirement of your buyers.
2 Keys to Level 3
Two elements are critical for properly setting up a Level 3 merchant account.
- Insist on an Interchange pricing structure, without it merchants will not be able to obtain all the incentives rates available.
- Use a secure PCI certified Level 3 payment processing technology.
To insure both, select an experienced merchant services partner.
Level 3 Interchange
Specific Interchange compliance requirements must be managed and include merchant category restrictions, authorization, clearing, timeliness and registration. For the card types that can qualify for Level 3, address verification, invoice number, tax amount, and line item detail fields like product code, item description, item quantity, unit of measure and extended item amount must be submitted with the standard sales information.
MasterCard and Visa Interchange differ for Level 3 in both rate and qualification requirements. With Visa commercial Interchange, submitting tax amount data is important to qualify for Level 2 rates. For tax exempt transactions, Visa offers Level 3 and B2B Interchange for 35 select industry categories as the next best rate. MasterCard's commercial Level 3 program is know as Data Rate III and these Interchange rates are available for Corporate, Business, Purchasing, Fleet, World Business, World Elite Business, World Corporate, World Elite Corporate charge types. MasterCard's Interchange includes a Corporate Large Ticket program.
Click here for a summary of Level 3 Data Elements
Level 3 Payment Technology
To take advantage of corporate, business and purchasing card Interchange, merchants must implement payment solutions that meet the more complex requirements of Level 3.
Standard credit card terminals are not capable of supporting Level 3. Payment solutions on the market that support Level 3 include payment software that can be licensed and installed on a PC or a virtual software service that can be accessed through a secure web site application. I recommend the virtual software to avoid having card data stored on local PCs that must be secured. With evolving Level 3 requirements, the virtual software is always the most updated version and multiple users can access the service on any computer with Internet access without traditional software licensing, installation and upgrade issues.
Vantage supports multiple Level 3 compliant payment technologies to meet our clients needs including: