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Acumatica Credit Card Processing Brand Compliance Guide to Lower Rates

Acumatica Credit Card ProcessingIf you are a credit card processing merchant using Acumatica Cloud ERP, you know your agreement with the card brands generally includes a provision requiring that you accept all types of cards that are valid for payment. In other words, if you accept Visa cards, you agree to accept all Visa cards.

For example, Visa’s Core Rules state:

“A US Merchant that wishes to accept Visa Cards must accept any valid Visa Card in its category of acceptance that a Cardholder properly presents for payment. This means that the Merchant must permit the Cardholder to choose whether to pay for a transaction with that Visa Card or with some other means of payment accepted by the Merchant.”

Mastercard’s Rules state:

“Merchants that accept MasterCard Cards may choose to accept Debit MasterCard Cards only, Other MasterCard Cards only, or both Debit MasterCard Cards and Other MasterCard Cards” and “Merchants that choose to accept MasterCard Cards must honor all MasterCard Cards without discrimination when properly presented for payment.”

These policies mean that if you accept commercial cards, it’s worth taking the time to understand and set-up procedures for sending enhanced data with your business card transactions.

Am I required to provide enhanced data?

No, but if you take a lot of business or purchasing cards, it’s in your best interest. When you accept a commercial card, it remains a commercial card whether or not you send the enhanced data with the transaction. However, without enhanced data, the transaction will not qualify for the best possible pricing.

If you only take commercial cards now and then, you may be able to set up credit card surcharges for those transactions to help defray the costs, but surcharging is often disliked by customers and should be considered carefully. If you take commercial cards regularly, qualifying for enhanced data is likely to be a better long-term solution.

Level 2 and 3 Rates

Okay, I’ve mentioned several times that it can be less expensive to accept commercial cards if they correctly qualify for the preferred interchange categories, but how much less expensive? Let’s take a look at what the costs would be with examples.

The information below is taken from the Visa interchange table for corporate and purchasing cards, referred to as commercial in Visa’s interchange categories.

Interchange Category Interchange Rate:

  • Commercial Level III:  1.90% + $0.10
  • Commercial Level II:  2.50% + $0.10
  • Commercial Card Present:  2.50% + $0.10
  • Commercial Card Not Present:  2.70% + $0.10
  • Commercial Standard Interchange Reimbursement Fee:  2.95% + $0.10

As you can see, the rate applied to a transaction that qualifies for Commercial Level 3 is 1.90% + $0.10. The rate for a Commercial Level 2 transaction is 2.50% + $0.10.

On the other hand, the Commercial Card Not Present category will cost you 2.70% + $0.10. That means that if you accept a commercial credit card and don’t provide level 2 or 3 data, you’ll pay .20% – .80% more.

The Commercial Standard Interchange Reimbursement Fee category is the lowest downgrade category, with the most expensive rate of 2.95% + $0.10. If you accept a commercial credit card, don’t provide level 2 or 3 data, and also fail to pass minimum requirements, your transactions will downgrade to this category, leaving you to pay a full 1.05% more than you could have paid with the Level 3 category.

Let’s look at a few examples.  Say you accept a Visa purchasing card for a $500 card-not-present transaction.   Here’s what you’d pay, if you:

  • Provide information to qualify for level 3: $9.60 (500 x 0.019 + 0.1)
  • Provide information to qualify for level 2: $12.60 (500 x 0.025 + 0.1)
  • Don’t provide any enhanced data: $13.60 (500 x 0.027 + 0.1)
  • Don’t provide enhanced data and downgrade: $14.85 (500 x 0.0295 + 0.1)

That’s a $5.25 difference between the interchange category with the lowest cost and the one with the highest. MasterCard’s interchange rates are similar, with the Data Rate III category incurring a 1.80% + $0.10 cost, which jumps to 2.95% + $0.10 for a “standard” (downgraded) commercial credit transaction.

Business credit cards have a slightly smaller gap, as you can see in this table taken from Visa’s interchange schedule.

Interchange Category Interchange Rate:

  • Business Level II:  2.05% + $0.10
  • Business B2B:  2.10% + $0.10
  • Business Retail:  2.20% + $0.10
  • Business Card Not Present:  2.25% + $0.10
  • Business Electronic Interchange Reimbursement Fee (EIRF):  2.40% + $0.10
  • Business Standard Interchange Reimbursement Fee:  2.95% + $0.20

In this case, the difference from the lowest priced category to the highest comes in at .90%. Although it’s a smaller gap than commercial card categories, it can still add up quickly. There’s no point in giving away an extra 1% on all your business card transactions if you can avoid it by providing enhanced data to qualify for better pricing.

Have you heard the term “Level 3” used in relation to Acumatica integrated payments? Do you know what it means? We’ll outline what this term means and explain the benefits and how you can save transaction fees by properly utilizing Level 3 payment processing.

Definition of the Phrase ‘Level 3’

Level 3, or ‘line-item detail,’ refers to the detailed transaction data required for you to submit when a payment card is used to make a purchase. The transaction details such as item, quantity purchased, and other merchant-specific order information is included.

Usually, Level 3 processing is required for purchases paid by credit card that is issued for a specific type of business purchase by a business or government agency. These include government-issued cards, business, or corporate purchasing cards.

How Does This Impact You?

If your company has customers that are government agencies, you’re most likely mandated to send Level 3 information so they can monitor purchases. Likewise, other businesses that you transact with on a regular basis will most likely require this at some point if they are using purchasing cards. The use of purchasing cards among mid-sized businesses is one of the fastest growing payment methods. Enabling Level 3 payments today will mean you’ll never have to turn away a customer who asks for this level of detail with their purchases.

Benefits of Acumatica Integrated Level 3 Processing

There are multiple benefits of integrating Level 3 line item detail into your ERP, including:

  • Save time by eliminating manual entry of Level 3 data per transaction
  • Lower transaction fees
  • Sell to any customer with a purchase card or to a government agency
  • Add Level 3 data to each invoice payment for your customers

Getting Started is Easy

While it may sound intimidating, getting started doesn’t have to be challenging. We have integrated Level 3 capabilities with dozens of ERP systems, including Acumatica. Our Acumatica integration automatically gathers the data and sends it with the card transaction when necessary without requiring extra steps. You can easily supply your customers with the extra information they need to make good business decisions and save yourself some money as well.

The other easy way to get started is to find an expert to guide you. VIP is a leading provider of integrated payment technology solutions to North American merchants, differentiated by our strategic partnerships and multiple platform model. VIP provides a broad suite of end-to-end payment solutions and superior US-based customer support. We have spent more than 10 years integrating and developing relationships.

VIP’s credit card processing solutions integrate seamlessly with your ERP/accounting system, allowing you to accept credit card payments inside your software. The integration automatically posts payments to invoices, so there’s no need to go back into your software to reconcile your invoices or balance your general ledger. How many hours will you save?

Contact our experts at VIP Integrated Payments today to start saving time and money with Level 3, Acumatica-integrated credit card payments.