Level 2 and 3 data

Level 2 and 3 data are extra details a merchant can send with a card transaction, beyond the basic amount and card number, to describe what was purchased. Card networks group transaction data into levels: Level 1 is a standard consumer purchase with minimal detail, Level 2 adds fields such as a tax amount and a customer code, and Level 3 adds full line-item detail such as item descriptions, quantities, and unit prices.

These levels exist because of interchange. Card networks often charge lower interchange rates on transactions that carry richer data, especially those made with corporate, purchasing, and government cards, because the added detail lowers their risk and supports the buyer's expense reporting. Sending Level 2 and Level 3 data can reduce processing costs on qualifying B2B transactions when every required field is present and accurate. A subscription platform such as Recurly can pass this enhanced data to the processor when it is available, so eligible transactions qualify for the better rates. Recurly passes Level 2 data, a tax amount and a PO number, on all of its supported gateways, and Level 3 data through Adyen. Visa's Level 2 interchange program is scheduled to end in April 2026 in favor of its newer CEDP program, which relies on Level 3 data instead.

Why Level 2 and 3 data matters for subscription businesses

For businesses that bill other businesses, Level 2 and 3 data can lower the interchange cost of every qualifying charge. Because subscriptions bill the same cards repeatedly, a small reduction in the rate on each transaction adds up across a large volume of recurring charges, which makes the data worth submitting where it applies.

A few reasons it matters:

• It can reduce interchange on qualifying B2B transactions, which lowers the cost of processing recurring revenue. Level 2 typically saves 0.05 to 0.50 percent versus Level 1, and Level 3 can save another 0.25 to 2.5 percent versus Level 2.

• It supports the buyer's needs, since corporate and purchasing cards often require detailed data for expense and tax reporting.

• It applies to every renewal, not just a one-time sale, so the same enhanced data can qualify each recurring charge.

How to use Level 2 and 3 data

Enhanced data only helps when it is complete and correct, because a transaction usually has to meet every field requirement for its level to qualify for the lower rate. Start by identifying which of your transactions run on cards that benefit, then make sure the required fields are captured and passed with each charge. Because the requirements are strict, confirm that the data was accepted rather than assuming it qualified.

Points to get right:

• Identify B2B, corporate, purchasing, and government card transactions where enhanced data applies.

• Capture the required fields, such as a tax amount, a customer code, and line-item detail, accurately at the source.

• Confirm the processor accepts the data and that the transaction qualifies, since incomplete data reverts to the standard rate. Level 2 requires tax information, a PO number, and a minimum tax percentage on the transaction, so tax-exempt purchases generally do not qualify, and passing AVS data also helps avoid downgrades.

• Keep tax and line-item data consistent with the invoice so the submitted detail matches the charge.

Benefits and examples

Submitting Level 2 and 3 data lets a B2B subscription business lower its processing costs without changing what it charges the customer. The saving comes purely from providing better information on transactions that already happen, and because recurring billing repeats those transactions, the benefit repeats with them. It also smooths the buyer's own workflows, since their finance team gets the detail their card program expects.

For example, a business that sells software to corporate buyers bills many of them on purchasing cards. By capturing tax amounts, customer codes, and line-item detail and passing that data with each charge, its qualifying transactions settle at a lower interchange rate than they would with basic data alone. Across a base of recurring B2B charges, the reduced rate on every qualifying renewal adds up, while the customer's experience and price stay the same.

Frequently asked questions

What is the difference between Level 1, Level 2, and Level 3 data? Level 1 is a basic transaction with minimal information, typical of consumer purchases. Level 2 adds fields such as a tax amount and a customer code. Level 3 adds full line-item detail such as item descriptions, quantities, and unit prices. Higher levels carry more data and can qualify for lower interchange on eligible cards.

Does every transaction benefit from Level 2 and 3 data? No. The lower rates generally apply to corporate, purchasing, and government cards, so consumer card transactions usually do not benefit. Sending enhanced data on a consumer card typically has no effect on the rate.

What happens if the enhanced data is incomplete? If a required field is missing or invalid, the transaction usually does not qualify for the better rate and is processed at the standard rate instead. Qualification generally requires all required fields for the level to be present and accurate. This holds true on Recurly: a missing or invalid required field causes the transaction to revert to a lower level's rate rather than being rejected.

Is submitting Level 2 and 3 data worth the effort? For businesses with significant volume on corporate or purchasing cards, the interchange savings across many recurring charges can outweigh the work of capturing and passing the data. For a mostly consumer base, the benefit is limited because those cards do not qualify.