If you take corporate or purchasing cards, you have probably heard someone say, "You need Level 2 or Level 3 processing to get lower interchange." That is directionally true, but it is also incomplete.
Level 2 and Level 3 are really shorthand for "enhanced data". You are sending more invoice context with the authorization and settlement so the card network can better classify the transaction. When the card type and the data both line up, the transaction can qualify for more favorable commercial interchange categories.
This guide explains what Level 2 and Level 3 mean in plain English, what data actually matters, how Visa's Commercial Enhanced Data Program (CEDP) changes the conversation, and how to validate whether your processor is doing any of this correctly.
Level 2 and Level 3 processing are ways of submitting extra purchase data on eligible commercial card transactions so they can qualify for different interchange treatment.
At a high level:
Not every card is eligible. Submitting Level 3-style data on a consumer rewards card does not magically turn it into a commercial interchange category.
If most of your revenue is B2B or B2G and you accept cards for invoices, you should care.
Common examples include:
If you are primarily B2C ecommerce, you might still see some benefit when corporate cards are used, but it is rarely the main lever to pull. In that case, your biggest pricing wins are usually from your base pricing model (interchange-plus vs tiered) and from controlling chargebacks.
Level 2 is invoice-level enhanced data. The point is to identify the payment as a business purchase with enough structure for the network to classify it.
Most processors talk about Level 2 as including fields like:
The exact required fields and formatting depend on the card network, the card product, and your acquirer.
Practical takeaway: if your checkout or invoicing system already knows the PO number and sales tax, but your gateway is not passing those fields, you are leaving potential qualification on the table.
Level 3 is line-item enhanced data. It adds an itemized invoice payload so the network can understand what was purchased.
Level 3 commonly includes:
You can think of it this way: Level 2 is "invoice header" data, and Level 3 is "invoice header plus invoice lines".
For Visa commercial transactions, the conversation is increasingly about Visa CEDP, not the old "Level 2 vs Level 3" labels.
In product documentation, platforms and gateways now describe submitting Level 2/3 fields in accordance with Visa's Commercial Enhanced Data Program (CEDP) rules, and they frame it as a path for B2B merchants to qualify for reduced interchange when requirements are met.
One example: Zuora's release notes describe updates to multiple gateway integrations to calculate and submit Level 2 and Level 3 card data in accordance with Visa's CEDP rules for Visa transactions, and they explicitly state the goal is helping eligible transactions qualify for Visa CEDP interchange benefits.
Practical takeaway: if you are a B2B merchant, you should ask your processor two separate questions:
1) Are you submitting enhanced data (Level 2/3 style fields) on eligible commercial transactions?
2) For Visa specifically, are you enabled and validated under Visa CEDP?
No. It depends on eligibility and on whether the data is actually being accepted.
A clean way to think about it:
In other words, Level 3 is not a coupon code. It is a data quality and qualification workflow.
Most failures are mundane:
This is one reason merchants often see "mysterious" downgrades in interchange-plus statements.
If you have not already read it, start with our overview of common hidden costs in interchange-plus pricing, then circle back to enhanced data qualification.
Internal link: https://merchantalternatives.com/interchange-plus-pricing-hidden-fees
Do not rely on a sales rep saying "Yes, we support Level 3."
Instead, ask for proof in one of these forms:
1) A gateway or processor log showing the enhanced data fields included in the authorization or settlement payload
2) A reporting view that shows Level 2/Level 3 qualification rates on commercial transactions
3) Item-level data visibility in your processor portal for commercial card payments
If you are using a platform like Zuora, the release notes hint at a useful approach: validate payloads end-to-end with your gateway or acquirer to confirm CEDP eligibility.
For many merchants, the best workflow is to run a controlled test:
Many modern billing and gateway stacks can pass enhanced data if it is mapped correctly.
Examples you can use as a sanity check:
The key is not which logo is on your gateway. The key is whether your specific integration is filling the right fields and whether your acquirer is passing them through.
Card enhanced data and ACH remittance both solve a similar business problem: "How does the payer tell the payee what the payment is for?"
With ACH, remittance often lives in addenda records. In NACHA formatting, a Record Type 7 Addenda can include payment-related information such as invoice numbers and notes, and SEC codes like CCD+ and CTX are used for B2B payments where remittance data matters.
The key difference is incentives:
If you are deciding between card and ACH for B2B, enhanced card data can reduce some card cost, but it does not turn cards into ACH. Likewise, ACH addenda can improve reconciliation, but it does not create card-like authorization protections.
Internal link: https://merchantalternatives.com/ach-returns-vs-chargebacks-merchant-guide
Treat enhanced data like a feature you have to define and test, not a buzzword.
Here is a checklist you can reuse:
If you are not sure how to interpret your statement after go-live, this guide on reserves and funding holds can help you understand other line items that show up when processors manage risk.
Internal link: https://merchantalternatives.com/merchant-account-reserves-and-funding-holds-guide
No. Level 3 is most common in B2G and larger enterprise procurement flows, but many corporate and purchasing cards in B2B can use enhanced data programs when the network and acquirer support it.
No. You still need an eligible commercial card and a processor setup that passes the data correctly. If the data is missing or invalid, you can see downgrades instead of savings.
Sometimes, but it depends on the gateway and the plugin. Many carts capture line items, but the gateway integration has to map and transmit enhanced fields in the correct format.
If you accept Visa commercial cards and you care about enhanced data qualification, you should assume CEDP matters. Ask your processor whether your Visa commercial transactions are enabled for CEDP and whether you have any validation issues.
It can be cheaper, but it is not a drop-in replacement. ACH remittance via addenda records is great for reconciliation, but it does not provide the same card acceptance behavior customers expect, and it has different dispute and authorization dynamics.
You can apply for a merchant account through Easy Pay Direct or another processor that fits your model. Other options worth a look: