For a business owner, aiming to start accepting money only from consumers, credit card processing fees can be a matter of concern as the fees can be very high, based on various factors. One thing that often confuses business owners is the difference between Level 2 and Level 3 processing fees. In this blog, we’ll discuss the difference between these two.
The level of your credit card processing fees is directly related to how much information you collect about a customer when they are making any payment online. Following is detailed information about Level 2 and Level 3 processing and can also help understand Level 2 and Level 3 discounts.
Level 2 – To process a Level 2 payment online, it is important that the businesses collect some useful information about the payer. The information provided for making the payment is reported back to the card issuer with the goal of ensuring safety while the customer is paying business. The overall process is monitored by the bank.
Level 3 – The next level of payment online charges online is level 3, which was originally invented to prevent excess government spending. The goal of this type of payment processing is to collect as much information as possible. The information is then passed to the cardholder's bank statement. Only businesses allowing huge transactions will be allowed to make this kind of transaction and are entitled to apply for level 3 discounts.
Whether you are running a small retail store or a big hotel where 100s of customers visit every day, understanding the difference between the types of payment processing levels can help make a smart business decision. The goal should be to help make payments as secure as possible without worrying about the higher costs. The key here is to search for a reliable payment processing partner that offers good Level 2 and Level 3 discounts so that you can save more on every transaction made for your business purchases or subscriptions.
