What Is Level 2 and Level 3 Data (And How It Lowers Your Interchange)

Quick answer: Level 2 and Level 3 data are extra layers of detail you send with a card transaction, like sales tax or line-item descriptions. For eligible commercial cards, sending this data can qualify you for lower interchange rates. On Visa, those two programs have now been consolidated into the Commercial Enhanced Data Program (CEDP), where the accuracy of the data matters as much as its presence.

Most B2B merchants discover their interchange problem the same way: someone in finance compares two statements, notices the effective rate creeping up, and asks why. The answer is usually not the pricing. It is the data.

Here is the part that surprises people, and it is the theme of everything below: capturing the data is not the same as transmitting it correctly. We have analyzed transaction payloads for merchants who were collecting every required field and still failing qualification on nearly every transaction.

This guide covers what Level 2 and Level 3 data are, what changed when Visa moved to CEDP, who qualifies, and the specific technical failures that keep merchants from earning rates they assume they already have.

What Are the Three Levels of Transaction Data?

Every card transaction carries data. The more detail you send, the more the card networks may reward you with lower interchange rates. There are three levels, and each one adds more information than the last.

One note before the definitions: this vocabulary is still exactly how Mastercard operates, and it is still how the industry talks. On Visa, the three-tier structure has been replaced by a single enhanced-data standard. More on that in the next section.

Level 1 Data

Level 1 is the bare minimum needed to complete a sale. It includes the:

• Card number
• Transaction amount
• Date
• Merchant information

In plain terms, Level 1 data says: “A purchase happened for this amount at this business.” Most small consumer purchases run on Level 1.

Level 2 Data

Level 2 data adds business-specific information.

Level 2 data includes:

• Sales tax amount
• Tax-exempt indicator
• A customer or purchase order (PO) reference code
• Merchant tax ID

It adds more information about the invoice and customer behind the purchase. This context matters most for business-to-business (B2B) sales.

Level 3 Data

Level 3 data is the most detailed. It includes everything in Level 2, plus line-item information about the purchase itself.

That includes:

• Item descriptions
• Quantities
• Unit prices
• Product or SKU codes
• Freight and duty amounts
• The invoice number
• Ship-from and ship-to ZIP codes

It’s a lot like handing over a full itemized receipt instead of just the total.

What Is Visa’s CEDP, and What Did It Replace?

In 2025, Visa introduced the Commercial Enhanced Data Program (CEDP), consolidating its Level 2, Level 3, and non-GSA large ticket interchange programs into a single structure. The rollout happened in stages:

• April 2025: A 0.05% (5 basis point) CEDP participation fee begins applying to enhanced-data commercial transactions.
• October 17, 2025: New Product 3 rates take effect and automated data validation goes live. The Level 3 program ends.
• April 2026: The Level 2 program sunsets, with a carve-out for fuel-only fleet transactions.

If you are reading this and wondering whether you should be sending Visa Level 2 data, that question no longer has a Visa answer. Both legacy programs are retired. What replaced them requires the full line-item set, and it checks the math.

Verified vs. Non-Verified Status

Under CEDP, merchants are classified based on the quality of the data they submit. Merchants whose transactions consistently pass Visa’s validation, generally around 90% over a rolling 30-day window, can reach verified status and receive interchange incentives at settlement. Merchants below that threshold receive incentives on a lag, after validation.

Two consequences worth understanding:

• Visa can adjust after the fact. Interchange incentives can be recovered when data-quality problems surface later, within a window of roughly 45 days after settlement. Savings you have already booked can move.
• The savings are net, not gross. Published processor guidance puts the rate improvement for verified merchants in the range of 15 basis points, against the 5 basis point participation fee. Your actual result depends on card mix, merchant category code, and data quality.

The practical shift: under the old programs, populating the fields was largely enough. Under CEDP, the fields have to be populated and internally consistent. Visa’s validation catalog runs to more than a hundred distinct error codes.

Does My Business and Card Type Qualify?

If your customers pay with corporate or commercial cards, enhanced data can move those transactions into better interchange categories.

Qualifying cards include:

• Corporate cards: Issued to employees of larger companies.
• Purchasing cards: Used by businesses to buy supplies and services.
• Business cards: Common among small businesses and sole proprietors.
• Fleet cards: Used to manage fuel and vehicle expenses. Note that Visa’s fuel-only fleet program was carved out of the 2026 Level 2 sunset, so fleet follows its own track.
• Some government procurement cards: Used by public agencies. GSA large-ticket purchases sit outside CEDP, so confirm which program applies before assuming.

Standard consumer credit and debit cards don’t qualify. So if most of your sales come from everyday shoppers, enhanced data won’t change much.

How Does Enhanced Data Lower Interchange Rates?

Card networks charge less on transactions they can verify in detail. More data means less ambiguity, and less ambiguity means lower assessed risk.

Three conditions have to hold. The card has to be an eligible commercial card. The merchant has to submit the required data, in the right fields, at the right point in the transaction lifecycle. And that data has to pass validation: totals reconcile, codes are in the expected format, every line item is present.

The third condition is where most merchants lose money, and almost none of them know it.

Why Merchants Who Send the Data Still Fail

We have run payload-level analysis for B2B merchants across a range of platforms and acquirers. The same five failures show up over and over, and none of them are visible from a monthly statement.

1. The reconciliation math does not close. Visa requires the settled transaction amount to equal the sum of line items, plus tax, plus freight, minus discounts. If a merchant’s gateway layout has no dedicated freight field, shipping charges have nowhere to go, and the transaction fails arithmetic validation automatically. The most common variation we see is tax being added on top of an amount that already reconciled without it.

2. Commodity codes are sent as text. Visa expects numeric, UNSPSC-style commodity codes. Merchants frequently send descriptive strings instead, such as “AUTO ACCESSO,” and just as frequently leave the order-level summary commodity code blank. Exact format requirements vary by acquirer and card product, so confirm what your processor expects rather than assuming a universal standard.

3. The data is captured at authorization and dropped at settlement. This is the most frustrating one, because the merchant did the work. Billing address, shipping data, line items, all collected correctly during authorization. Then the submit-for-settlement API call goes out without the shipping amount, the discount amount, the tax-exempt indicator, or the line-item detail. From Visa’s side, the enhanced data was never sent.

4. Multi-item orders get truncated to one line. Enhanced data requires every line of an order to be transmitted. Plenty of order-export processes consolidate a twelve-item order into a single summary line before it reaches the gateway. We have also seen the reverse problem on large orders: line item totals cross-assigned between rows, so item three carries item seven’s price.

5. Address verification gaps. Full qualification often depends on a complete AVS match. Merchants who are reluctant to require a full billing address, usually out of cart-abandonment concerns, create linkage gaps that block qualification on otherwise clean transactions.

None of these show up as a line item on your statement. They show up as an effective rate that is quietly higher than it should be.

What That Looks Like in Practice

On a recent CEDP review for a B2B merchant processing through a major bank acquirer, we analyzed 474 transactions covering 2,451 line items across a two-month period.

Four hundred seventy-two of the 474 were failing Visa’s validation. That is a 99.6% failure rate against a standard that requires roughly 90% of transactions to pass.

Two error codes accounted for all of it. Roughly 80% of the failures traced back to a single cause: sales tax was being added on top of a total that already reconciled without it. A second cluster involved line item totals that did not equal unit price times quantity after discounts, mostly rounding, with a handful of items whose prices appeared to be cross-assigned between rows on the same order.

At the merchant’s current volume, we estimated somewhere between $33,000 and $36,000 a year sitting in the gap between verified and non-verified status. That is an estimate rather than a guarantee, and it tightens once a small set of outlier transactions is explained.

The point of the example is not the dollar figure. It is that this merchant was sending Level 3 data. They were sending it wrong, and had been for months.

Does Mastercard Still Use Level 2 and Level 3 Data?

Yes. Mastercard’s U.S. interchange schedule effective April 17, 2026 still lists its commercial data-rate programs, and they work the way they always have.

One terminology note that matters the moment you open a rate schedule or get on a call with your processor: Mastercard calls these Data Rate I, Data Rate II, and Data Rate III, not Level 1, 2, and 3. The concepts map cleanly enough, with Data Rate II covering the business-detail tier and Data Rate III adding line-item detail, but the names differ. Data Rate III is available on large market credit products rather than across all commercial debit and prepaid, and Mastercard maintains a separate Large Ticket program alongside them.

So while Visa has moved to CEDP, Mastercard’s structure stayed recognizable. If you process meaningful volume on both networks, you are managing two different rule sets against one data pipeline, and a field mapping that satisfies one will not automatically satisfy the other.

How Do You Start Capturing Level 2 and Level 3 Data?

Start with what is actually coming in, then work backward through the systems that touch it.

1. Audit your commercial card volume: Figure out how much of your processing is commercial versus consumer. If commercial volume is a rounding error, this is not your highest-leverage project.
2. Confirm your processor and gateway support the full field set: Not all do, including some that market themselves as enterprise-ready. Check that they support your specific merchant category code, and check that a dedicated freight field exists.
3. Connect the data at the source: Feed the required fields automatically from your invoice, ERP, or accounting system. Manual entry does not survive CEDP validation at volume.
4. Verify the payload at settlement, not just at authorization. Most implementations skip this. Pull your own request logs rather than relying only on your gateway’s server logs, and confirm the full payload is present in the submit-for-settlement call.
5. Monitor your validation results after go-live: Watch your error codes and your verified status. Reprocess a small batch after any fix and confirm it comes back clean before assuming it worked across all volume.

Frequently Asked Questions

What’s the difference between level 2 and level 3 data?

Level 2 data adds business-level details to a transaction, like sales tax, a PO reference code, and the merchant tax ID. Level 3 data includes all of that, plus line-item details such as item descriptions, quantities, unit prices, commodity codes, freight, and shipping ZIP codes.

Do all businesses qualify for level 2 or level 3 rates?

No. They apply to commercial cards—such as corporate, purchasing, business, and fleet cards. Standard consumer credit and debit cards don’t qualify.

Did Visa eliminate Level 2 and Level 3 processing?

Visa retired both programs. The Level 3 program ended in October 2025 and the Level 2 program sunset in April 2026, with a fuel-only fleet carve-out. Both were replaced by the Commercial Enhanced Data Program (CEDP). Enhanced data still lowers costs, but the data now has to pass validation.

What is CEDP verified status? 

Verified status means your transactions consistently pass Visa’s data validation, generally around 90% over a rolling 30-day window. Verified merchants receive interchange incentives at settlement. Non-verified merchants receive them on a lag, and incentives can be adjusted afterward if data-quality problems surface.

Does Mastercard still use Level 2 and Level 3 data?

Yes. Mastercard’s U.S. interchange schedule effective April 17, 2026 still lists Data Rate I, II, and III, its equivalents to Level 1, 2, and 3, along with a separate Large Ticket program. Data Rate III applies to large market credit products. Merchants processing on both networks should plan for two sets of rules.

How do I know if my enhanced data is actually working? 

Look at validation results rather than field completion. A gateway can report that every required field was populated while Visa rejects the transaction for failing arithmetic reconciliation. If you have never reviewed your error codes, that is the place to start.

Find Out What Your Data Is Actually Costing You 

If your business processes commercial cards, Level 2 and Level 3 data can offer a direct path to lower interchange rates and smaller processing costs. The savings only arrive if the data is complete, consistent, and present at settlement. Most merchants have never seen their own validation results, and that is the gap worth closing first.

Start here. We analyze your actual transaction payloads, identify which validation checks are failing and why, and hand your developers a specific remediation list rather than a general recommendation.