Get Lower Rates With Level 2 and Level 3 Credit Card Processing (2026) | Finix
Level 2 and Level 3 credit card processing refers to the additional transaction data merchants can submit to qualify for lower interchange rates on commercial card payments.
When implemented correctly, this can significantly reduce payment processing costs for B2B businesses, SaaS platforms, and marketplaces.
However, the landscape has changed. As of January 2026, Visa has retired its Level 2 program, meaning Level 3 data (now part of its Commercial Enhanced Data Program, or CEDP) is the primary path to interchange savings on Visa commercial cards.
This guide explains:
- What Level 2 and Level 3 processing actually are
- What data you need to submit
- Which card types qualify
- How much you can realistically save
- And how to implement it correctly
What are the three levels of credit card processing?
Credit card transactions are categorized into three processing levels based on how much data is submitted at the time of authorization.
The more detailed and structured the transaction data, the lower the perceived risk for card networks, and the lower the interchange rate for eligible transactions.
Comparison overview
| Level | Data required | Eligible cards | Interchange impact |
|---|---|---|---|
| Level 1 | Basic transaction data | All cards | Standard rates (highest) |
| Level 2 | Level 1 + summary business data | Commercial cards (network dependent) | Lower than Level 1 |
| Level 3 | Level 1 + Level 2 + line-item detail | Commercial cards | Lowest available rates |
Level 1 processing
Level 1 is the default for all card transactions and includes standard payment data such as:
- Card number
- Expiration date
- Billing ZIP/postcode
- Transaction amount
- Transaction date
- Merchant category code (MCC)
All merchants operate at this level unless additional data is submitted.
Level 2 processing
Level 2 processing adds summary-level business data to the transaction, such as:
- Sales tax amount
- Tax indicator
- Customer reference or PO number
This additional data can qualify certain commercial card transactions for lower interchange rates.
Note: Visa retired its Level 2 program in January 2026. For Visa commercial card transactions, Level 3 data (Product 3 under CEDP) is now required to qualify for any interchange savings.
Mastercard Level 2 processing is still supported.
Level 3 processing
Level 3 processing includes all Level 1 and Level 2 data, plus detailed line-item information about the transaction.
This typically includes:
- Item descriptions
- Quantity and unit cost
- Product or commodity codes
- Line item totals and discounts
- Shipping, duty, and tax amounts
- Invoice and order numbers
- Shipping origin and destination
Because this provides the highest level of transaction transparency, it qualifies for the lowest interchange rates on eligible commercial cards.
What data fields are required at each level?
Level 1 data fields
- Card number
- Expiration date
- Transaction amount
- Transaction date
- Merchant name
- Merchant category code (MCC)
Level 2 data fields
- Sales tax amount
- Tax indicator
- Tax ID (in some cases)
- Customer code, PO number, or reference ID
Note: Visa Level 2 is no longer applicable for most commercial transactions as of 2026. Mastercard continues to support Level 2.
Level 3 data fields
Includes all Level 1 and Level 2 data, plus:
- Item description
- Item quantity
- Unit of measure
- Unit cost
- Product or commodity code
- Line item total
- Discount per line item
- Freight or shipping amount
- Duty amount
- Ship-from ZIP/postcode
- Destination ZIP/postcode and country
- Invoice number
- Order number
To qualify for Level 3 rates under Visa’s CEDP, data must be complete, accurate, and structured correctly, not just partially populated.
Which card types are eligible for Level 2 or Level 3 processing?
Not all card transactions qualify for Level 2 or Level 3 interchange rates. Eligibility depends on the card network and the type of card used.
Quick overview
| Card type | Level 2 eligible | Level 3 eligible | Notes |
|---|---|---|---|
| Visa commercial cards | ❌ (retired in 2026) | ✅ | Level 3 (CEDP/Product 3) required for savings |
| Mastercard commercial cards | ✅ | ✅ | Supports both Level 2 and Level 3 |
| American Express | ✅ | ❌ | Level 3 not supported |
| Consumer credit cards | ❌ | ❌ | No L2/L3 savings available |
Visa
Level 2 and Level 3 processing historically applied only to commercial credit cards (e.g. corporate, business, and purchasing cards).
As of 2026, Visa has replaced its legacy Level 2 and Level 3 programs with its Commercial Enhanced Data Program (CEDP). Under this model:
- Level 2 is no longer supported
- Level 3 (Product 3 data) is required to qualify for reduced interchange rates
- Business credit cards are now eligible for these enhanced rates
Mastercard
Mastercard continues to support both Level 2 and Level 3 processing for:
- Commercial credit cards
- Commercial debit cards
- Commercial prepaid cards
This gives merchants more flexibility, particularly if they are not yet passing full Level 3 data.
American Express
American Express supports Level 2 processing only. Level 3 data does not provide additional interchange benefits for Amex transactions.
Consumer cards
Level 2 and Level 3 processing does not apply to consumer credit or debit cards, regardless of how much data is submitted. This is a key limitation: If your customers primarily pay with consumer cards, implementing Level 2/Level 3 processing will have little to no impact on your overall processing costs.
How much can you save?
Level 2 and Level 3 processing can significantly reduce interchange costs for eligible transactions.
While exact rates vary by card network, card type, merchant category code (MCC), and transaction details, the difference between levels is significant.
Illustrative rate comparison
| Processing level (card network-dependent) |
Typical interchange range |
|---|---|
| Level 1 | ~2.7% – 3.0% |
| Level 2* | ~2.3% – 2.6% |
| Level 3 | ~1.7% – 2.1% |
*Level 2 savings are no longer available for Visa transactions as of 2026, but still apply to some Mastercard and American Express transactions.*
Level 3 transactions can reduce interchange costs by up to 1 percentage point or more compared to Level 1.
Example: monthly savings
A B2B SaaS platform processing $100,000/month in commercial card volume: At Level 1 rates (around 2.9%), that same volume would result in roughly $2,900 in interchange. At Level 3 (around 1.9%), costs fall to about $1,900.
Estimated savings: ~$1,000/month or ~$12,000/year.
Important considerations
- Savings only apply to eligible commercial card transactions
- Not all transactions will qualify, even with correct data
- Rates vary by network and interchange category
- Implementation effort (especially for Level 3) should be weighed against volume
Visa vs. Mastercard: What’s different?
While both networks support enhanced data programs, their requirements and structure differ.
- Visa
- Level 2 retired as of 2026
- Level 3 (CEDP / Product 3) is the only path to savings
- Strong emphasis on data accuracy and validation
- Mastercard
- Supports both Level 2 and Level 3
- Less rigid validation requirements compared to Visa
- Broader eligibility across credit, debit, and prepaid
Key takeaway
- Visa is moving toward a single, stricter standard (CEDP)
- Mastercard maintains a more flexible, multi-tier model
Who should use Level 2 and Level 3 processing?
Level 2 and Level 3 processing is not most effective for businesses that process a high volume of commercial card transactions, where interchange savings can outweigh the effort required to implement additional data fields.
For B2B-focused businesses, the impact can be substantial. SaaS platforms, for example, often bill other businesses using corporate cards. By passing the required Level 3 data alongside each transaction, they can reduce processing costs without changing pricing or customer behavior.
The same applies to businesses that sell into government entities. Purchasing cards (P-cards), commonly used in public sector procurement, are among the transactions most likely to qualify for the lowest interchange rates when Level 3 data is provided correctly.
Marketplaces and platforms also benefit, particularly when they charge subscription fees, commissions, or service fees to business users. In these cases, payments are frequently made with commercial cards, making Level 3 optimization a meaningful lever for improving margins.
That said, this approach isn’t always worth pursuing. If your transaction volume is low, or if most of your customers pay with consumer cards, the operational overhead of implementing Level 3 may outweigh the savings. This is especially true if your payment flow doesn’t naturally capture the required line-item data.
How to implement Level 2 and Level 3 processing
The most important requirement for actually qualifying for lower interchange rates is timing. The necessary data must be passed at the moment of authorization. It cannot be added later, and incomplete submissions won’t qualify for reduced rates.
From a technical perspective, both your payment processor and your gateway or API integration must support Level 2 and Level 3 data fields. Even if you collect the right information, it won’t have any impact unless it’s structured and transmitted correctly during the transaction.
For teams building custom integrations, this typically means mapping billing, invoicing, or order data into the required payment fields and ensuring consistency across transactions.
For merchants processing Visa transactions specifically, it’s also important to account for recent changes to interchange qualification requirements.
What Is Visa’s CEDP and what does it mean for Level 2 and Level 3?
Visa’s Commercial Enhanced Data Program (CEDP) replaces its legacy Level 2 and Level 3 interchange programs with a single, modernized standard for commercial card transactions.
Beginning in late 2025, Visa introduced stricter validation of Level 3 data. As of January 2026, Level 2 processing has been fully retired. This means that for Visa commercial cards, Level 3 data (referred to as Product 3 under CEDP) is now the only path to reduced interchange rates.
Unlike the previous model, simply submitting additional fields is no longer enough. Data must be accurate, complete, and structured correctly to qualify. Transactions that don’t meet these standards may not receive reduced rates, and in some cases, can be downgraded.
Frequently Asked Questions
What is Level 2 and Level 3 credit card processing? Level 2 and Level 3 credit card processing refers to submitting additional transaction data (beyond standard payment details) to qualify for lower interchange rates on commercial card transactions. Level 2 includes summary data, such as tax amount and customer reference numbers, while Level 3 adds detailed line-item information, like product descriptions, quantities, and shipping details.
Is Level 2 processing still available? It depends on the card network. As of January 2026, Visa has retired Level 2 processing. For Visa commercial cards, Level 3 data (under CEDP) is now required to qualify for reduced interchange rates.
Mastercard still supports Level 2 processing, and American Express supports Level 2 but not Level 3.
Which card types qualify for Level 2 and Level 3 processing?
Only commercial cards qualify for Level 2 and Level 3 interchange rates. This includes corporate, business, and purchasing cards.
Consumer credit and debit cards are not eligible for Level 2 and 3 processing, regardless of how much transaction data is submitted.
Do I need a special payment processor to use Level 2 and Level 3? Yes. Your payment processor and gateway must support Level 2 and Level 3 data submission.
Even if you collect the required data, it must be passed correctly at the time of authorization to qualify for lower interchange rates. Some providers, like Finix, support this out of the box or provide tools to simplify implementation.
Can I add Level 2 or Level 3 data after a transaction is processed? No. The required data must be submitted during the authorization stage of the transaction. If the data is missing or incomplete at that point, the transaction will be processed at standard Level 1 rates.
Is Level 3 processing always worth it? Not always. Level 3 processing is most valuable for businesses with high volumes of commercial card transactions, such as B2B platforms or government suppliers.
If your customers primarily use consumer cards, or your transaction volume is low, the savings may be limited compared to the effort required to implement it.