moneydif.com Level 2 data includes additional payment information such as tax amount, customer code, and invoice number, enhancing transaction details beyond basic cardholder data. Level 3 data provides even more granular details like line-item descriptions, quantities, and unit prices, enabling greater transparency and improved reconciliation for B2B and government transactions. Using Level 3 data reduces processing costs and increases approval rates by offering enhanced transaction clarity to card issuers.
Table of Comparison
| Feature | Level 2 Data | Level 3 Data |
|---|---|---|
| Data Detail | Basic transaction info (merchant name, zip code, tax amount) | Comprehensive line-item details (product codes, item descriptions, quantities, unit costs) |
| Purpose | Reduces interchange fees for business-to-business (B2B) & government payments | Maximizes cost savings for large volume transactions and government procurement |
| Typical Use Cases | Card-not-present transactions with moderate detail requirements | Commercial purchasing, wholesale, and government contracts |
| Data Elements | Merchant Tax ID, Customer Code, Invoice Number | Merchant Tax ID, Customer Code, Invoice Number, Item-Level Data (SKU, Description, Quantity, Unit Price) |
| Benefits | Lower transaction fees than Level 1; faster processing | Lowest interchange rates; enhanced dispute protection |
Understanding Level 2 and Level 3 Payment Data
Level 2 payment data includes detailed transaction information such as tax amount, customer code, and purchase order number, enhancing authorization and reporting for business-to-business (B2B) and government payments. Level 3 payment data provides even deeper insights with itemized line-level details, including product descriptions, quantities, and unit prices, facilitating greater transparency and optimizing payment processing for large corporate and government clients. Utilizing Level 2 and Level 3 data streamlines reconciliation, reduces processing costs, and minimizes chargebacks by improving transaction accuracy.
Key Differences Between Level 2 and Level 3 Transaction Data
Level 2 transaction data includes additional details such as tax amount, customer code, and purchase order number, enhancing reporting accuracy compared to Level 1 data. Level 3 data provides more granular information, including item descriptions, quantities, unit prices, and product codes, enabling deeper transaction analysis and improved reconciliation. The key difference lies in the depth of detail, with Level 3 data supporting better cost management and dispute resolution for B2B and government transactions.
Benefits of Using Level 2 Data in Payment Processing
Level 2 data enhances payment processing by providing detailed transaction information such as tax amounts, customer codes, and purchase order numbers, which reduces chargebacks and improves authorization rates. Merchants benefit from lower interchange fees due to the enriched data set, resulting in cost savings and more accurate reporting for business analytics. Integrating Level 2 data supports smoother B2B and government transactions, optimizing cash flow and operational efficiency.
Advantages of Level 3 Data for Merchants
Level 3 data provides merchants with enhanced transaction details, including item descriptions, quantities, and unit prices, enabling better reconciliation and reduced chargebacks. This comprehensive data improves approval rates and often qualifies merchants for lower interchange fees, boosting overall profitability. Access to Level 3 data also supports detailed reporting and analytics, facilitating strategic business decisions and more efficient inventory management.
Level 2 vs Level 3 Data: Compliance and Security Implications
Level 3 data offers enhanced transaction details such as item descriptions, quantities, and tax information, improving compliance with card networks' requirements and reducing interchange fees compared to Level 2 data. Unlike Level 2, which primarily captures basic purchase information, Level 3 data enables stronger fraud detection and greater transparency, supporting PCI DSS compliance and mitigating data breach risks. Merchants processing Level 3 data benefit from improved security protocols and comprehensive audit trails, fostering trust and regulatory adherence in payment transactions.
How Level 2 and Level 3 Data Affect Interchange Rates
Level 2 data includes additional details such as tax amount, customer code, and invoice number, which helps lower interchange rates compared to standard Level 1 transactions by reducing risk for card networks. Level 3 data goes further by providing line-item details including product descriptions, quantities, and unit prices, leading to the lowest interchange fees because of increased transaction transparency and reduced fraud potential. Merchants processing business-to-business (B2B) and government payments benefit significantly from using Level 3 data to optimize payment processing costs.
Level 2 and Level 3 Data Requirements by Card Networks
Level 2 data requirements by card networks include merchant information, tax amount, and customer code to enhance transaction detail and reduce processing costs. Level 3 data demands more granular details such as item descriptions, quantities, unit prices, and product codes to maximize interchange rate savings and improve reconciliation accuracy. Compliance with these data levels varies across Visa, Mastercard, and American Express, with strict formatting and data field mandates to ensure transaction transparency and fraud prevention.
Best Practices for Collecting Level 2 and Level 3 Payment Data
Collecting Level 2 and Level 3 payment data requires capturing detailed transaction information such as tax amounts, customer codes, and product descriptions to optimize processing and minimize interchange fees. Ensuring data accuracy and completeness by integrating payment systems with ERP or procurement platforms enhances the quality of Level 2 and Level 3 data. Utilizing automated data validation and standardized formats improves compliance with card network requirements and facilitates seamless payment reconciliation.
Common Use Cases for Level 2 vs Level 3 Data
Level 2 data enhances transaction details with tax amount, customer code, and merchant postal code, which benefits B2B and government payments by enabling better expense tracking and reporting. Level 3 data includes even more granular information such as item descriptions, quantities, and unit prices, making it ideal for large corporate purchases and government procurements where detailed reconciliation and auditing are required. Merchants leveraging Level 3 data often experience lower interchange rates and improved transparency, driving efficiency in complex payment scenarios.
Choosing the Right Payment Solution for Level 2 and Level 3 Data
Selecting the appropriate payment solution hinges on understanding the distinctions between Level 2 and Level 3 data requirements, where Level 2 data includes enhanced transaction details such as tax amount and customer code, while Level 3 data offers even more granular details like item descriptions and quantities. Businesses processing B2B or government transactions benefit from Level 3 data solutions due to reduced interchange fees and improved transparency. Implementing a payment gateway that supports both Level 2 and Level 3 data ensures compliance, optimizes cost savings, and enhances reporting accuracy.
Important Terms
Line-item detail
Level 2 data includes additional transaction details such as tax amount, customer code, and purchase order number, providing enhanced reporting beyond basic Level 1 data. Level 3 data extends this further by offering comprehensive line-item detail including item description, quantity, unit price, and product codes, enabling more precise reconciliation and analysis for business-to-business and government transactions.
Enhanced data fields
Level 2 data includes detailed transaction information such as tax amounts, customer codes, and invoice numbers, which enhances payment processing and reconciliation accuracy. Level 3 data provides even more granular details like item descriptions, quantities, unit cost, and purchase orders, enabling improved analytics, cost tracking, and higher interchange fee savings for businesses.
Interchange rates
Interchange rates for transactions utilizing Level 3 data are typically lower than those using Level 2 data due to the enhanced detail and transparency provided in Level 3 data, which reduces processing risk and fraud potential. Merchants submitting Level 3 data, including line-item details such as item descriptions, quantities, and tax amounts, benefit from discounted interchange fees compared to the more general transaction information required in Level 2 data.
Purchase order matching
Purchase order matching leverages Level 2 data, focusing on invoice and purchase order alignment for accurate validation, while Level 3 data enhances this process by incorporating detailed line-item information, such as product descriptions and quantities, enabling more precise reconciliation and fraud detection. Utilizing Level 3 data significantly improves purchase order matching accuracy and streamlines payment approvals by providing granular transaction details that surpass the summary-level insights of Level 2 data.
Tax amount breakdown
Tax amount breakdown using Level 2 data provides detailed transaction information with basic item descriptors, supplier info, and purchase order references, enabling moderate tax calculation accuracy. Level 3 data offers the most granular details, including line-item costs, quantities, and tax rates, resulting in precise tax amount determination and improved compliance with tax regulations.
Commercial card transactions
Commercial card transactions with Level 2 data include enhanced information such as tax amount, customer code, and purchase order number, improving processing accuracy and reducing declines. Level 3 data provides even more detailed line-item information like item descriptions, quantities, and unit prices, optimizing transaction transparency and enabling better reconciliation for corporate buyers.
Invoice line capture
Invoice line capture enhances transaction detail by extracting itemized purchase information, crucial for Level 3 data which includes product descriptions, quantities, and unit prices, enabling deeper spend analysis and supplier insights. Level 2 data offers less granularity, typically providing merchant category codes and tax amounts, making Level 3 invoice line capture essential for optimizing reporting accuracy and improving cost control in B2B payment processes.
Merchant Category Code (MCC)
Merchant Category Code (MCC) classifies businesses by industry to streamline transaction processing, with Level 2 data enhancing payment details by including tax amounts and customer codes, improving transaction accuracy and reporting. Level 3 data provides even more granular purchase details such as item descriptions, quantities, and unit prices, critical for B2B and government payments to maximize interchange savings and reconciliation efficiency.
Data enrichment
Level 2 data, typically raw transaction details like purchase amounts and timestamps, forms the foundation for data enrichment by providing granular insights into customer behavior. Level 3 data enhances this by integrating detailed attributes such as product descriptors, customer demographics, and contextual information, enabling deeper analytics and personalized marketing strategies.
Corporate card program
Corporate card programs leveraging Level 2 data typically capture key transaction details such as tax amounts and customer codes, enhancing expense tracking and simplifying reconciliation processes. Incorporating Level 3 data extends this capability by providing granular information like item descriptions, quantities, and unit prices, significantly improving reporting accuracy and enabling more precise spend analysis for businesses.
Level 2 data vs Level 3 data Infographic
