Level 2 and Level 3 Processing Requirements

When merchants accept personal credit cards, the most common type of transaction, it is typically a Level 1 transaction. These transactions require very little data. Only the merchant name, transaction amount, and date need to be sent in addition to the card information.

Merchants are rewarded with lower interchange rates if they choose to participate in Level 2 or Level 3 processing by collecting and sending additional information. Only corporate and government cards are eligible for Level 3. This information can be sent back to the corporation or government entity that provided the card and makes the reporting on their card purchases much more detailed. Card brands can then use detailed reporting as a selling point for their corporate card programs, as they have incentivized merchants to gather that data for them.


Level 2 Requirements

Level 2 requires only a few pieces of data beyond the requirements of Level 1 transactions and providing this information yields an interchange reduction of up to 0.50%. Transactions must be taxable and the tax rate must be between 0.1% and 30%. Below are the required fields:


  • Customer Code (if supplied by cardholder)
  • Tax Amount (Tax amount is not required for certain MCCs)
  • Card Acceptor Tax ID


  • Tax Amount


Level 3 Requirements

Level 3 processing can net merchants an interchange discount of up to 1%, but they have to be willing to collect and input quite a bit of information. Again, only corporate and government cards are able to achieve Level 3 rates. The following fields are required for Level 3 and are in addition to the requirements for Levels 1 and 2 (AmEx and Discover do not participate in Level 3):


  • Product Code
  • Item description
  • Item quantity
  • Unit of measure
  • Extended item amount


  • Discount amount
  • Freight/shipping amount
  • Duty amount
  • Item Sequence Number
  • Item commodity code
  • Item description
  • Product code
  • Quantity
  • Unit cost
  • Unit of Measure
  • Discount per line item
  • Line item total

*Sales tax is no longer required for Level 3 on Visa


Fattmerchant's Virtual Terminal Plus supports Level 2 and Level 3 processing. Virtual Terminal Plus is a web browser application and is not mobile or tablet friendly. For the best web browser experience, Firefox and Chrome is recommended. MAC iOS and Safari are not supported.

We can also facilitate connecting your Enhanced Data-capable software through our gateway to process Level 2 and 3 transactions.

Please contact your Account Manager to get started with the Virtual Terminal Plus or a compatible gateway.