Setting up your B2G business to properly accept purchasing and government cards for payment, is a lot different than establishing a standard retail or MOTO merchant account. This blog entry will help to explain the benefits of  Level 3 Processing for business-to-business (B2B) and business-to-government (B2G) companies and the keys to properly setting up a Level 3 merchant account.

Why Do You Need A Level 3 Merchant Account?

Purchasing cards (p-cards) are issued to large corporations and government agencies as their main method for purchasing products, goods and services. Purchasing cards possess more features and capabilities than standard consumer credit cards. P-card transactions are estimated to reach $200 Billion in 2011, up from $110 Billion in 2005.

Think your business is too small to land a lucrative government contract? Think again. Almost a quarter of all federal contracts and 40% of all subcontracts go to small businesses. Consider that more than 350 federal entities participate in GSA’s SmartPay program— using purchasing cards (p-cards) to make purchases of goods and services needed for their operations, spending more than $27 billion on over 90 million transactions in fiscal year 2007. Purchasing cards allow them to make purchases quickly and more conveniently than previously used methods of purchasing. Because of these benefits, more agencies are attempting to shift purchasing to vendors that accept these type of credit cards. This trend  is expected to continue grow well into the future meaning more and more sales opportunities for your business.

Corporations and businesses are also aggressively adopting purchasing, corporate and business credit cards to help reduce administrative expenses and eliminate unneeded paperwork and additional man hours.

Level 3 Merchant Account Benefits:

The benefits of  setting up a Level 3 Merchant Account are many for your business. By accepting  p-cards as payment, you will improve your profitability by reducing payment time from 30-60 days to only 24-48 hours.  Reduce collection expenses and reduce the cost of floating funds until payments are received.  Qualifying for Level 3 processing rates will reduce processing costs significantly over traditional retail and MOTO merchant processing rates and fees. Having Level 3 processing will also increase your competitiveness in winning new federal government contracts and may even be a requirement in order to do so.

Level 3 Interchange

For the card types that can qualify for Level 3, address verification, invoice number, tax amount, and line item detail fields like product code, item description, item quantity, unit of measure and extended item amount must be submitted with the standard sales information.

MasterCard and Visa Interchange differ for Level 3 in both rate and qualification requirements. With Visa commercial Interchange, submitting tax amount data is important to qualify for Level 2 rates. For tax exempt transactions, Visa offers Level 3 and B2B Interchange for 35 select industry categories as the next best rate. MasterCard’s commercial Level 3 program is know as Data Rate III and these Interchange rates are available for Corporate, Business, Purchasing, Fleet, World Business, World Elite Business, World Corporate, World Elite Corporate charge types. MasterCard’s Interchange includes a Corporate Large Ticket program.

Two Things Are Key For Properly Setting Up A Level 3 Merchant Account

1. Insist on an Interchange Pass-Through pricing structure, without it you will not be able to obtain all the incentives rates available.
2. Make sure you are using a secure, PCI compliant Level 3 payment processing technology. This is why it is crucial for you to select an experience merchant services provider who understands Level 3 processing.

While there are many things to consider, these two are crucial when considering a Level 3 Merchant account.

Level 3 Payment Processing Technology

Standard counter-top credit card terminals are not capable of supporting Level 3. Payment solutions that support Level 3 processing include payment software that can be  installed on a PC or a virtual terminal and payment gateway that can be accessed through a secure web site application. I recommend the virtual software to avoid having card holder data stored on your local PC. With evolving Level 3 requirements, the virtual software is always the most updated and secure option and multiple users can access the service on any computer with Internet access.

There are multiple choices from which your company or business can choose according to your preferences and cost. When you speak with one of our merchant consultants, ask about your choices and the differences in each.

Remember the important thing is working with a merchant services provider with experience and know how in setting up a Level 3 merchant account. Tailored Transactions has over 10 years of experience working closely in the B2G industry and processing government purchasing card payments. Let us help your business setup a Level 3 Merchant Account, saving you both money and time and allowing you the opportunity to secure more lucrative government contracts in the future.

Visit Tailored Transactions online at www.TailoredTransactions.com or call their offices toll free at 888-669-1686. You can also email then for more information at info@tailoredtransactions.com

Tags: b2g merchant accounts, B2G merchant services, gsa smart cards, level 3 interchange rates, level 3 merchant account, Level 3 processing, level 3 processing rates, p-cards, purchasing card payments, setup level 3 processing

This entry was posted on April 15, 2011 at 12:38 am. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Posted in B2G Merchant Account B2G Merchant Services Commercial Credit Cards GSA Smart Cards Level 3 Interchange Level 3 Merchant Account Level 3 Merchant Processing Level 3 processing Level 3 Rates Merchant Account Setup Purchasing Card Payments by tailoredtrans No Comments Yet