Level 1, 2 and 3 data for payment processing

Level 1, Level 2, and Level 3 data refer to different levels of data requirements and reporting that merchants must adhere to when processing transactions, especially in the context of business-to-business (B2B) and corporate transactions. These levels are associated with the Payment Card Industry Data Security Standard (PCI DSS) and are relevant to businesses that accept credit card payments, particularly for larger transactions involving corporate or government clients.

Here’s an overview of each level of data and the associated requirements:

  1. Level 1 Data:
    • Level 1 data is the most basic level of data required for credit card transactions and involves the least amount of information.
    • It typically includes the minimum necessary data for a transaction, such as the card number, expiration date, and the transaction amount.
    • Level 1 data transactions are often consumer transactions, such as retail purchases.
  2. Level 2 Data:
    • Level 2 data adds more information to the transaction data, primarily aimed at business-to-business (B2B) transactions.
    • In addition to the basic Level 1 data, Level 2 data includes additional details such as tax amount, customer code, and merchant postal code.
    • Level 2 data allows for more detailed reporting and enhanced transaction analysis.
  3. Level 3 Data:
    • Level 3 data is the most comprehensive and detailed level of data required for credit card transactions.
    • It is primarily used for B2B and corporate transactions, especially when dealing with government agencies or large corporations.
    • Level 3 data includes detailed line-item information about the products or services purchased, along with additional information such as item descriptions, quantities, unit prices, and extended amounts.
    • This detailed information enables sophisticated reporting and analysis of transaction data for both the buyer and the seller.
    • Level 3 data transactions often qualify for lower interchange rates, which can lead to cost savings for the merchant.

Payment processors, in accordance with the requirements of the card networks (such as Visa, MasterCard, and American Express), may have specific criteria for merchants to qualify for processing transactions at each level of data. These criteria typically include:

  • Level 1 Data: Generally, there are no specific additional requirements beyond the standard PCI DSS compliance.
  • Level 2 Data: Merchants processing Level 2 data transactions may need to provide additional transaction details beyond the basic Level 1 data. This could include tax details and merchant information.
  • Level 3 Data: Merchants processing Level 3 data transactions need to provide comprehensive line-item details for each transaction. This information can be quite detailed and may require integration with the merchant’s systems to gather and transmit this data.

It’s important to note that these levels of data and associated requirements are primarily relevant to B2B transactions and not all merchants are required to provide or process Level 2 or Level 3 data. The specific requirements and benefits associated with each level can vary based on the card networks, payment processors, and the merchant’s industry and clientele.

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