Business credit

How Merchants Can Cut Costs with Tier 3 Processing

By Marcy Bok, Marketing Director, i3Verticals —

You’ve probably been told that business credit cards are expensive to process, but that’s not entirely true. Traders can take certain actions to achieve lower prices. If your business accepts corporate credit cards, you may qualify for better rates.

As a merchant who accepts business credit cards, you know that the payments you accept are processed through a complex and often complicated network of vendors. Several factors affect who receives a payment. However, all payments must go through card networks such as Visa, Mastercard, American Express and Discover.

When a payment goes through the card networks, a commission called interchange is charged. Interchange is set by the networks, and that’s why many merchants think there’s no way to reduce these specific fees. But this is not the case.

Although the rates are fixed in advance by the networks, lower rates may be applied to payments meeting certain criteria. If the payment gateway passes Level 3 card data along with a transaction, the details provided may qualify for lower interchange rates and these rates generally correspond to lower processing costs.

Card networks use many factors to determine redemption for transaction types, including card type, transaction amount, and whether the card was present at the time of the sale. For example, a $10,000 transaction made via an internet-based purchase card will be charged at a different rate than a $100 transaction made via a debit card without a PIN presented at the point of sale.

When this level of detail is included in qualified transactions, it can significantly reduce costs. Not all processors pass Level 3 data, and it’s important that you partner with a service provider that can help your business benefit from these savings.

bokMarcy Bok is the Marketing Director of i3Verticals. i3Verticals is an AEM member company and provider of comprehensive software solutions with expertise in multiple industries. For more information, visit

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