Level 2 Credit Card Processing Interchange

Level 2, also referred to as Level II, Card Data is additional information that can be attached to a credit card transaction string to provide more information for business, commercial, corporate, purchasing, and government cardholders. Both Visa and MasterCard maintain Level 2 Card Data Interchange Rates that are applied to transactions that are submitted with Level 2 Data.

Commercial, Corporate, Business, Purchasing, and Government credit card transactions submitted with Level II Card Data can obtain lower Interchange Rates, and thus provide the merchant with a lower processing cost, than the exact same transactions submitted without the additional Level 2 Card Data. Therefore, it is always in the merchant’s best interest to submit Level II Card Data with their Commercial, Corporate, Business, Purchasing, and Government credit card sales whenever possible.

Retail merchants will often encounter Level 2 Card Data when they swipe a corporate/commercial/business card and the credit card terminal prompts for a “Customer Code” or “PO Number”. This is often mistaken as a request for the three or four digit CVV2 code on the back or front of the card.

In fact, the terminal is reading the magnetic strip on the card and recognizing that the corporate/commercial/business credit card account has a Customer Code/PO Number feature. The Customer Code/PO Number is a four digit number that appears on the cardholder’s credit card billing statement that allows the cardholder to track purchases made with the card number. This is useful for corporate/commercial/business card accounts where more than one employee or person may have access to the card or card number.

When a retail merchant gets the Customer Code/PO Number prompt, the merchant should ask the customer if they know their Customer Code or PO Number, and then enter it with the sale. Unfortunately, many cardholders either do not use the feature, do not know what it is, or do not know the four digit customer code number. In these cases, the merchant should enter any random four digit number, and in most cases, the transaction will clear at the lower, Level 2 Interchange Rate. Entering four zeros or four ones or the same four digit number each time will not clear at Level II Data Rates, the number must be randomized each time.

Often, after the Customer Code/PO Number prompt, retail merchants will see the next most common Level 2 Card Data request, which is a prompt from the terminal to enter a Tax Amount. If there is sales tax on the purchase, the merchant should enter the amount of tax paid. If there is no sales tax, the merchant should enter zero. In either case, the merchant should receive the Level 2 Interchange Rate on the sale. If the merchant enters through this prompt without entering a tax amount or a zero, the sale will not qualify for a Level II Data Rate.

How To Submit Level II Card Data

Submitting Level II Data for Commercial / B2B Credit Card Processing

Commercial, Corporate, Business, Purchasing, and Government credit card transactions submitted with Level II Card Data can obtain lower Interchange Rates, and thus provide the merchant with a lower processing cost, than the exact same transactions submitted without it.

Therefore, it is always in the merchant’s best interest to submit Level II Card Data whenever possible.

  • After swiping or keying in a card eligible for Level II rates, the terminal will prompt for a “Customer Code” or “PO Number / # “
  • Ask the cardholder if they know the Customer Code / PO Number. The number is always 4 digits.
  • If the Customer Code / PO Number is unavailable, enter the last 4 digits of the card number.
  • The next prompt will be for “Tax Amount”.
  • If charging Sales Tax, enter the amount. If not charging Sales Tax, enter 0. This field is for reporting only, and will not add anything to the total charge.
  • Complete the transaction