How Interchange Affects Your Business, and Why It Matters

REDUCING THE RISK TO REDUCE THE FEE

If a merchant can reduce the risk of a dispute or chargeback, they will, in turn, get a lower interchange cost and keep more money as profit.

HOW DO WE REDUCE RISK?

Card issuers want as much information as possible. Level 2 and 3 require more information from the merchant which in turn will reduce the risk to accomplish the lower fees. Most merchants collect Level 1 data, which is the basic information about the transactions such as date and amount. Level 2 and Level 3 require the merchant to collect more detailed information from the transaction which can become a hurdle for businesses because they may not have the information to enter, the correct equipment or a processor that can process the information.

WHAT TYPE OF INFORMATION IS KEY?

Level 2

Tax Amount

Customer Code

Merchant Postal Code

Tax Identification

Merchant Minority Code

Merchant State Code

Level 3

Ship from Postal Code

Destination Postal Code

Invoice Number

Order Number

Item Product Code

Item Commodity Code

Item Description

Item Quantity

Item Unit of Measure

Item Extended Amount

Freight Amount

Duty Amount

This is where interchange optimization comes in to play.

Elavon helps merchants identify Level 2 and Level 3 payment processing opportunities and provides recommendations that can help lower interchange fees, improve cash flow, and enhance reporting. Elavon’s Level 2 and Level 3 programs populate the necessary data for the merchant with no up-front cost.