If your business accepts credit cards, processing fees are part of the cost of doing business.
At the core of those costs is interchange. These are the base fees set by the card networks like Visa and Mastercard. Every time a customer pays by card, interchange is applied, and there is very little flexibility to change those base rates.
However, there are ways to optimize how transactions are processed, which can reduce your overall costs.
One of the most effective methods, especially for certain types of businesses, is Level 2 transaction processing.
Table of Contents
Understanding Transaction Levels
Not all credit card transactions are treated the same.
Level 1 transactions
These are standard, everyday transactions. If you accept credit cards today, you are already processing at Level 1.
Level 2 transactions
These apply primarily to corporate cards and purchasing cards. They require additional data to be submitted with the transaction..
Why Level 2 Matters
When the required data is included, transactions can qualify for lower interchange rates.
For businesses that accept a meaningful volume of corporate or government cards, this can translate into real, measurable savings.
Instead of paying the standard rate, you may qualify for a reduced rate simply by providing more detail about the transaction.creased fraud and chargeback risks.
What Additional Information Is Required?
To qualify for Level 2 rates, transactions typically include:
- Customer code or reference number
- Tax amount
- Tax identification details
The exact requirements can vary depending on the card issuer, but the concept is consistent.
More data equals lower risk for the card networks, and that results in lower interchange costs.
The Trade-Off
Manually entering this information can slow down the checkout process.
That is why many businesses never take advantage of Level 2, even when they could benefit from it.
Many merchants stick with outdated pricing without realizing better options exist.
How Avant Payments Simplifies It
At Avant Payments, we focus on making cost savings simple and automatic.
With the right integrations, Level 2 data can be:
- Captured automatically
- Applied to qualifying transactions
- Submitted without disrupting your workflow
This allows you to reduce your processing costs without adding friction at checkout.
Is Level 2 Right for Your Business?
Level 2 processing is most valuable if you:
- Work with other businesses (B2B)
- Accept corporate or purchasing cards regularly
- Process higher average transaction sizes
If that sounds like your business, there is a strong chance you are leaving money on the table today.
Final Thoughts
Interchange rates are largely fixed, but how your transactions are structured is not.
Level 2 processing is one of the few ways to legitimately reduce costs without changing providers or negotiating rates.
If you want to see whether your business qualifies, Avant Payments can review your current setup and show you exactly where savings are possible.
