Level 2 / Level 3 Processing

Visa Level 2 Deprecation Notice

Starting April 17, 2026, Visa will not accept Level 2 data for lower interchange rates. To keep interchange savings on Visa transactions, create Transfers with Level 3 data and Authorizations with Level 3 data. Mastercard Level 2 processing is unaffected.

In this guide, you'll learn the requirements of L2/L3 processing, which merchant types are ineligible, how to enable L2/L3, and how to create a sale, authorization, and capture using L2/L3.

Credit card processing fits into three levels: Level 1, Level 2, and Level 3 processing.

Each level is defined by the amount of information needed to complete a transaction.

Level 1: Normal interchange, no additional fields required.
Level 2: Lower interchange, additional fields required. Visa is ending its Level 2 offering in April 2026.
Level 3: Lowest interchange, additional fields required.

For Level 2 and Level 3 processing, only business-to-business merchants and the government can receive lower interchange fees. Additionally, a corporate, business, or purchase card is required to obtain the lower interchange rate for Level 2 and 3 processing.

This feature is only supported on Visa and Mastercard branded cards.
Because only business-to-business and government transactions qualify, the Merchant needs to be enabled for Level 2/3 processing.
Level 2 and Level 3 processing is only available in Live environments. This feature isn't available to test in Sandbox environments.
Tax-exempt transactions are not eligible for Level 2. They are eligible for Level 3.
Merchant must be located in the United States.

Supported APIs

Level 2 / Level 3 Processing is available for:

Ineligible Merchants

Specific businesses are excluded from processing Level 2 and 3 transactions.

If a Merchant has one of the following Merchant Category Codes ( MCC), they aren't eligible to process Level 2/3 transactions:

MCC Code	Merchant 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

Network Support

Network	Level 2	Level 3
Visa	⚠️ Deprecated April 17, 2026	Yes
Mastercard	Yes	Yes

Quality Data

It’s important that the data that is being passed along is accurate. The card network's validation technology will identify generic descriptions, placeholder data, and artificially generated content. The data must be real, accurate, and descriptive of the actual products or services being sold. There will be additional dues and assessments associated with the network's validation of data quality, effective October 17, 2025.

The examples below are meant to help point you in the right direction, but it isn’t exhaustive. Ultimately, the card network decides whether the data a merchant submits qualifies.

Finix Line Item Field	Card Network Recommendation	Avoid
`item_data#item_description`	They must provide meaningful information about purchased items/services	Do not provide merchant name, single characters, or generic descriptions
`item_data#merchant_product_code`	Typically, the SKU or identifier by which the Merchant tracks and prices the item or service. Must always be provided for every line item. Product code can be: • Merchant's product code • Manufacturer's product code • Buyer's product code This field must provide information about the purchase and not the customer.	Do not use erroneous data, such as the card product or MCC

Update a Merchant to Enable Level 2/3 Processing

Before a Merchant can process Level 2 or 3 transactions, update the Merchant resource and enable level_two_level_three_data_enabled. For more information, see Update a Merchant.

The APIs to update Merchant flags are only available for Finix Core customers. If you have additional questions, please reach out to your Finix point of contact or email the Finix Support team.

Example
API Definition

put /merchants/{merchant_id}

Sandbox server https://finix.sandbox-payments-api.com/merchants/{merchant_id}

cURL

curl -i -X PUT \
  -u USfdccsr1Z5iVbXDyYt7hjZZ:313636f3-fac2-45a7-bff7-a334b93e7bda \
  https://finix.sandbox-payments-api.com/merchants/MUwfZPNW3r4EqLMzwgr6txw4 \
  -H 'Content-Type: application/json' \
  -d '{
    "level_two_level_three_data_enabled": true
  }'

Example Response:

Example
API Definition

Merchant - Level 2/3 Processing Enabled

{
  "id": "MUcDAtijYcoVLamxHhzQc7fZ",
  "created_at": "2024-06-04T15:08:28.57Z",
  "updated_at": "2024-08-16T14:00:33.06Z",
  "application": "APgPDQrLD52TYvqazjHJJchM",
  "card_cvv_required": false,
  "card_expiration_date_required": true,
  "card_network_details": null,
  "convenience_charges_enabled": false,
  "country": null,
  "creating_transfer_from_report_enabled": true,
  "currencies": null,
  "default_partial_authorization_enabled": false,
  "disbursements_ach_pull_enabled": false,
  "disbursements_ach_push_enabled": false,
  "disbursements_card_pull_enabled": false,
  "disbursements_card_push_enabled": false,
  "disbursements_same_day_ach_pull_enabled": false,
  "disbursements_same_day_ach_push_enabled": false,
  "fee_ready_to_settle_upon": "RECONCILIATION",
  "gateway": null,
  "gross_settlement_enabled": false,
  "identity": "IDwq5EgdjhsWvpkJQEdfrs9y",
  "instant_payouts_card_push_enabled": false,
  "level_two_level_three_data_enabled": true,
  "loan_repayment": null,
  "mcc": null,
  "merchant_name": "John Doe",
  "merchant_profile": "MPgivonuyqNTmZ3xsXyFnoYf",
  "mid": "FNX8RFGJ2BWc7CufRXpvbeUVV",
  "onboarding_state": "APPROVED",
  "processing_enabled": true,
  "processor": "DUMMY_V1",
  "processor_details": {
    "mid": "FNX8RFGJ2BWc7CufRXpvbeUVV",
    "api_key": "secretValue"
  },
  "ready_to_settle_upon": "RECONCILIATION",
  "ready_to_settle_upon_delay_alignment": "NONE",
  "rent_surcharges_enabled": false,
  "settlement_enabled": true,
  "settlement_funding_identifier": "UNSET",
  "surcharges_enabled": false,
  "tags": {},
  "unreferenced_refund_manual_entry_enabled": false,
  "verification": "VIjcwzg18pa3u384cGkT1R9L",
  "_links": {
    "self": {
      "href": "https://finix.sandbox-payments-api.com/merchants/MUcDAtijYcoVLamxHhzQc7fZ"
    },
    "identity": {
      "href": "https://finix.sandbox-payments-api.com/identities/IDwq5EgdjhsWvpkJQEdfrs9y"
    },
    "verifications": {
      "href": "https://finix.sandbox-payments-api.com/merchants/MUcDAtijYcoVLamxHhzQc7fZ/verifications"
    },
    "merchant_profile": {
      "href": "https://finix.sandbox-payments-api.com/merchant_profiles/MPgivonuyqNTmZ3xsXyFnoYf"
    },
    "application": {
      "href": "https://finix.sandbox-payments-api.com/applications/APgPDQrLD52TYvqazjHJJchM"
    },
    "verification": {
      "href": "https://finix.sandbox-payments-api.com/verifications/VIjcwzg18pa3u384cGkT1R9L"
    }
  }
}

Creating Sales with Level 2 and Level 3 Processing

Once level_two_level_three_data_enabled is updated to true, the Merchant can process both Level 2 and Level 3 Transfers and Authorizations.

Level 2 and Level 3 Processing combines the data that gets requested during creation and captures it into one API call. An Authorization with Level 2 or Level 3 processing only needs to be captured if the data is different or changes from the original Authorization.

When processing Level 2 and Level 3 transactions, it's required to include additional fields when creating a Transfer and Authorization.

There are no changes in the post-payments experience (reversals, refunds, settlements, etc.) when processing Level 2 or Level 3 transactions.
The request arguments noted as required are the minimum amount of information needed for L2 or L3 interchange rates. There’s no additional benefit in passing every available request argument for a particular level.
Sales tax amount entered must be greater than 0.1% of the amount of the transaction.
If the transaction is tax exempt pass tax_exempt as true.

Creating a Sale with Level 2 and Level 3 Processing

Create a Sale with Level 2 Processing

Create a Transfer and include the required request arguments to include Level 2 processing.

Example
API Definition

post /transfers

Sandbox server https://finix.sandbox-payments-api.com/transfers

cURL

curl -i -X POST \
  -u USfdccsr1Z5iVbXDyYt7hjZZ:313636f3-fac2-45a7-bff7-a334b93e7bda \
  https://finix.sandbox-payments-api.com/transfers \
  -H 'Content-Type: application/json' \
  -H 'Finix-Version: 2022-02-01' \
  -d '{
    "additional_purchase_data": {
      "customer_reference_number": "321xyz",
      "sales_tax": 200
    },
    "amount": 1000,
    "currency": "USD",
    "merchant": "MUmfEGv5bMpSJ9k5TFRUjkmm",
    "source": "PI6iQcTtJNCS8GZAVKYi5Ueb"
  }'

A successful request returns a 201 Created status code and includes a Transfer resource with level 2 processing details in the response.

Example
API Definition

Transfer - Level 2 Processing

{
  "id": "TR96bu4Szu8dEKUMs1wDUW5z",
  "created_at": "2025-07-25T18:07:41.41Z",
  "updated_at": "2025-07-25T18:07:41.41Z",
  "additional_buyer_charges": null,
  "additional_healthcare_data": null,
  "additional_purchase_data": {
    "customer_reference_number": "321xyz",
    "customs_duty_amount": null,
    "destination_country_code": null,
    "destination_postal_code": null,
    "discount_amount": null,
    "invoice_reference_number": null,
    "order_date": null,
    "sales_tax": 200,
    "sales_tax_finix_generated": null,
    "ship_from_postal_code": null,
    "shipping_amount": null,
    "tax_exempt": false,
    "item_data": []
  },
  "address_verification": "POSTAL_CODE_AND_STREET_MATCH",
  "amount": 1000,
  "amount_requested": 1000,
  "application": "APc9vhYcPsRuTSpKD9KpMtPe",
  "currency": "USD",
  "destination": null,
  "externally_funded": "UNKNOWN",
  "failure_code": null,
  "failure_message": null,
  "fee": 0,
  "fee_profile": "FPuizPqrhzYLbmJm88u7aqfj",
  "idempotency_id": null,
  "merchant": "MUmfEGv5bMpSJ9k5TFRUjkmm",
  "merchant_identity": "ID6UfSm1d4WPiWgLYmbyeo3H",
  "messages": [],
  "operation_key": "CARD_NOT_PRESENT_SALE",
  "parent_transfer": null,
  "parent_transfer_trace_id": null,
  "raw": null,
  "ready_to_settle_at": "2025-07-26T18:07:41.87Z",
  "receipt_last_printed_at": null,
  "security_code_verification": "MATCHED",
  "source": "PI6iQcTtJNCS8GZAVKYi5Ueb",
  "split_transfers": [],
  "state": "SUCCEEDED",
  "statement_descriptor": "FLX*FINIX FLOWERS",
  "subtype": "API",
  "supplemental_fee": null,
  "tags": {
    "test": "Sale"
  },
  "tip_amount": null,
  "trace_id": "b0c469c5-21a4-43a1-915d-df72a297d039",
  "type": "DEBIT",
  "_links": {
    "application": {
      "href": "https://finix.sandbox-payments-api.com/applications/APc9vhYcPsRuTSpKD9KpMtPe"
    },
    "self": {
      "href": "https://finix.sandbox-payments-api.com/transfers/TR96bu4Szu8dEKUMs1wDUW5z"
    },
    "merchant_identity": {
      "href": "https://finix.sandbox-payments-api.com/identities/IDhC29dXMAkbmr1aBpS91Hpx"
    },
    "payment_instruments": {
      "href": "https://finix.sandbox-payments-api.com/transfers/TR96bu4Szu8dEKUMs1wDUW5z/payment_instruments"
    },
    "reversals": {
      "href": "https://finix.sandbox-payments-api.com/transfers/TR96bu4Szu8dEKUMs1wDUW5z/reversals"
    },
    "fees": {
      "href": "https://finix.sandbox-payments-api.com/fees?linked_to=TR96bu4Szu8dEKUMs1wDUW5z"
    },
    "disputes": {
      "href": "https://finix.sandbox-payments-api.com/transfers/TR96bu4Szu8dEKUMs1wDUW5z/disputes"
    },
    "source": {
      "href": "https://finix.sandbox-payments-api.com/payment_instruments/PI6iQcTtJNCS8GZAVKYi5Ueb"
    },
    "fee_profile": {
      "href": "https://finix.sandbox-payments-api.com/fee_profiles/FPuizPqrhzYLbmJm88u7aqfj"
    }
  }
}

Creating an Authorization with Level 2 and Level 3 Processing

Create an Authorization with Level 2 Processing

Create an Authorization with the additional fields to include Level 2 processing.

curl https://finix.sandbox-payments-api.com/authorizations \
  -H "Content-Type: application/json" \
  -H 'Finix-Version: 2022-02-01' \
  -u  USsRhsHYZGBPnQw8CByJyEQW:8a14c2f9-d94b-4c72-8f5c-a62908e5b30e \
  -d '{
    "additional_purchase_data": {
      "customer_reference_number": "321xyz",
      "sales_tax": 200
    },
    "amount": 1000,
    "currency": "USD",
    "merchant": "MUeDVrf2ahuKc9Eg5TeZugvs",
    "processor": "DUMMY_V1",
    "source": "PIe2YvpcjvoVJ6PzoRPBK137",
    "tags": {
      "order_number": "21DFASJSAKAS"
    }
  }'

A successful response returns 201 and the newly created Authorization.

{
    "id": "AUazNfgBGxPoJ9FbVzsdYLWm",
    "created_at": "2022-10-10T06:39:30.18Z",
    "updated_at": "2022-10-10T06:39:30.56Z",
    "address_verification": "POSTAL_CODE_AND_STREET_MATCH",
    "amount": 1000,
    "amount_requested": 1000,
    "application": "APgPDQrLD52TYvqazjHJJchM",
    "currency": "USD",
    "expires_at": "2022-10-17T06:39:30.18Z",
    "failure_code": null,
    "failure_message": null,
    "idempotency_id": null,
    "is_void": false,
    "merchant": "MUeDVrf2ahuKc9Eg5TeZugvs",
    "merchant_identity": "IDuqZpDw28f2KK6YuDk4jNLg",
    "messages": [],
    "security_code_verification": "MATCHED",
    "source": "PIe2YvpcjvoVJ6PzoRPBK137",
    "state": "SUCCEEDED",
    "tags": {
        "order_number": "21DFASJSAKAS"
    },
    "trace_id": "85aeb017-f405-4938-a0f9-a91b9b9ef591",
    "transfer": null,
    "void_state": "UNATTEMPTED",
    "_links": {
        "self": {
            "href": "https://finix.sandbox-payments-api.com/authorizations/AUazNfgBGxPoJ9FbVzsdYLWm"
        },
        "application": {
            "href": "https://finix.sandbox-payments-api.com/applications/APgPDQrLD52TYvqazjHJJchM"
        },
        "merchant_identity": {
            "href": "https://finix.sandbox-payments-api.com/identities/IDuqZpDw28f2KK6YuDk4jNLg"
        }
    }
}