{"id":72,"date":"2006-02-14T06:22:03","date_gmt":"2006-02-14T13:22:03","guid":{"rendered":"http:\/\/www.merchantaccountblog.com\/?p=72"},"modified":"2006-02-14T08:16:39","modified_gmt":"2006-02-14T15:16:39","slug":"level-1-2-and-3-credit-card-processing","status":"publish","type":"post","link":"https:\/\/www.merchantequip.com\/merchant-account-blog\/72\/level-1-2-and-3-credit-card-processing","title":{"rendered":"Level 1, 2, and 3 credit card processing"},"content":{"rendered":"

The credit card processing system is setup on a three level system. These levels of requirements are made to determine if a certain transaction is a qualified transaction. A qualified transaction will ensure that the business gets the lowest qualified processing rate that they are signed up with. <\/p>\n

If the criteria for being qualified is not met, the transaction downgrades. When a transaction downgrades, an additional processing and\/or transaction fee is also assessed on the transaction. Downgrade charges can be costly for some businesses do it is important to know what is required for a transaction to be qualified.<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n

Processing Level Qualification Chart<\/h2>\n<\/td>\n<\/tr>\n

\n

This chart explains exactly how much information needs to be passed through the processing system for a level 1, 2 or 3 transaction to not-downgrade and remain qualified, for the lowest possible processing rate.<\/p>\n<\/td>\n<\/tr>\n

\n

Data Type<\/b><\/p>\n<\/td>\n

\n

Level 1<\/b><\/p>\n<\/td>\n

\n

Level 2<\/b><\/p>\n<\/td>\n

\n

Level 3<\/b><\/p>\n<\/td>\n<\/tr>\n

\n

Merchant Name <\/p>\n<\/td>\n

X<\/td>\nX<\/td>\nX<\/td>\n<\/tr>\n
\n

Transaction Amount <\/p>\n<\/td>\n

X<\/td>\nX<\/td>\nX<\/td>\n<\/tr>\n
\n

Data<\/p>\n<\/td>\n

X<\/td>\nX<\/td>\nX<\/td>\n<\/tr>\n
\n

Tax Amount <\/p>\n<\/td>\n

 <\/td>\nX<\/td>\nX<\/td>\n<\/tr>\n
\n

Customer Code (16 Char) <\/p>\n<\/td>\n

 <\/td>\nX<\/td>\nX<\/td>\n<\/tr>\n
\n

Merchant Postal Code <\/p>\n<\/td>\n

 <\/td>\nX<\/td>\nX<\/td>\n<\/tr>\n
\n

Tax Identification <\/p>\n<\/td>\n

 <\/td>\nX<\/td>\nX<\/td>\n<\/tr>\n
\n

Merchant Minority Code <\/p>\n<\/td>\n

 <\/td>\nX<\/td>\nX<\/td>\n<\/tr>\n
\n

Merchant State Code <\/p>\n<\/td>\n

 <\/td>\nX<\/td>\nX<\/td>\n<\/tr>\n
\n

Item Product Code <\/p>\n<\/td>\n

 <\/td>\n <\/td>\nX<\/td>\n<\/tr>\n
\n

Item Description <\/p>\n<\/td>\n

 <\/td>\n <\/td>\nX<\/td>\n<\/tr>\n
\n

Item Quantity <\/p>\n<\/td>\n

 <\/td>\n <\/td>\nX<\/td>\n<\/tr>\n
\n

Item Unit of Measure <\/p>\n<\/td>\n

 <\/td>\n <\/td>\nX<\/td>\n<\/tr>\n
\n

Item Extended Amount <\/p>\n<\/td>\n

 <\/td>\n <\/td>\nX<\/td>\n<\/tr>\n
\n

Item Net \/ Gross Indicator <\/p>\n<\/td>\n

 <\/td>\n <\/td>\nX<\/td>\n<\/tr>\n
\n

Item Tax Amount <\/p>\n<\/td>\n

 <\/td>\n <\/td>\nX<\/td>\n<\/tr>\n
\n

Item Tax Rate <\/p>\n<\/td>\n

 <\/td>\n <\/td>\nX<\/td>\n<\/tr>\n
\n

Item Tax Identifier <\/p>\n<\/td>\n

 <\/td>\n <\/td>\nX<\/td>\n<\/tr>\n
\n

Item Discount Indicator <\/p>\n<\/td>\n

 <\/td>\n <\/td>\nX<\/td>\n<\/tr>\n
\n

Ship from Postal Code <\/p>\n<\/td>\n

 <\/td>\n <\/td>\nX<\/td>\n<\/tr>\n
\n

Freight Amount <\/p>\n<\/td>\n

 <\/td>\n <\/td>\nX<\/td>\n<\/tr>\n
\n

Duty Amount <\/p>\n<\/td>\n

 <\/td>\n <\/td>\nX<\/td>\n<\/tr>\n
\n

Destination Postal Code <\/p>\n<\/td>\n

 <\/td>\n <\/td>\nX<\/td>\n<\/tr>\n
\n

Destination Country Code <\/p>\n<\/td>\n

 <\/td>\n <\/td>\nX<\/td>\n<\/tr>\n
\n

Alternate Tax Amount <\/p>\n<\/td>\n

 <\/td>\n <\/td>\nX<\/td>\n<\/tr>\n<\/table>\n

Level 1 transaction are your standard retail transaction. The card holder is using a personal credit card issued from an American bank.<\/p>\n

Level 2 transaction are normally corporate cards issued from an American bank.<\/p>\n

Level 3 transaction are government credit cards or corporate cards. <\/p>\n

Level 1 and 2 transactions can be run through a standard credit card terminal or PC processing program if setup correctly. Level 3 transactions require special software to transmit the extra information required to qualify the transaction.<\/p>\n

Businesses that have many downgrades due to corporate and government card acceptance should look into a level 2 or level 3 processing solution to avoid downgrading.<\/p>\n

Reference Posts:<\/strong>
\nWhat Does All This Mean? – Merchant Account Fees<\/a>
\nWhy am I downgrading? – Part 1\/3 – Reasons<\/a>
\nWhy am I downgrading? – Part 2\/3 – Preventing<\/a>
\nWhy am I downgrading? – Part 3\/3 – Case Studies<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The credit card processing system is setup on a three level system. These levels of requirements are made to determine if a certain transaction is a qualified transaction. A qualified transaction will ensure that the business gets the lowest qualified processing rate that they are signed up with. If the criteria for being qualified is […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-72","post","type-post","status-publish","format-standard","hentry","category-merchantaccounts"],"_links":{"self":[{"href":"https:\/\/www.merchantequip.com\/merchant-account-blog\/wp-json\/wp\/v2\/posts\/72","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.merchantequip.com\/merchant-account-blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.merchantequip.com\/merchant-account-blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.merchantequip.com\/merchant-account-blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.merchantequip.com\/merchant-account-blog\/wp-json\/wp\/v2\/comments?post=72"}],"version-history":[{"count":0,"href":"https:\/\/www.merchantequip.com\/merchant-account-blog\/wp-json\/wp\/v2\/posts\/72\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.merchantequip.com\/merchant-account-blog\/wp-json\/wp\/v2\/media?parent=72"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.merchantequip.com\/merchant-account-blog\/wp-json\/wp\/v2\/categories?post=72"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.merchantequip.com\/merchant-account-blog\/wp-json\/wp\/v2\/tags?post=72"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}