How to accept government purchase cards.
Almost any processor can set you up to accept government purchase cards however, if your goal is to accept government purchase cards at the lowest possible interchange rate, its very important to make sure your processor understands interchange as it relates to government p cards.
Government Purchase cards qualify at 1 of 3 different interchange levels, level 1, level 2 and level 3. The different levels are based on additional information you include with your transactions.
Accept government purchase cards without level 3 processing information, you will always pay roughly 1% more than the best rate you can receive from a processor. Level 3 processing was initially created to help the government manage spending/employees using government issued credit cards. Visa and MasterCard created special level 3 processing interchange rates as a way to encourage government vendors to enter more information (level 3 detail) which showed up on the governments banks statement.
Level 3 processing is similar to information you would find on an invoice, PO#, product descriptions etc. Basically the who, when and how. Level 3 processing detail does not automatically show up on your customers bank statement. This only happens when they have a special P-card program set up. As long as level 3 detail is processed with your government purchase cards, and non government commercial transactions, you save roughly 1% on interchange fees.
Insist on Level 3 processing and cost plus pricing. This will clear your transactions at a lower interchange rate, level 3 interchange rate vs level 1. Commercial/Purchase cards are the only cards you will accept that have three different interchange rates.
If you have any questions relating to how to accept government purchase cards , about level 3 processing or whether or not your accepting these cards correctly, give us a call
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