Corporate Card Processing

Accept Business Credit Cards

Lower Your B2B Processing Costs with Level 2 & Level 3 Data Optimization

Accept corporate cards, purchasing cards, and business credit cards at significantly lower rates. Coastal Pay’s intelligent processing automatically qualifies your B2B transactions for Level 2 and Level 3 interchange rates—saving you 0.30-0.70% per transaction while providing the enhanced data corporate buyers need for their accounting and compliance requirements.

Why Corporate Card Processing Matters:

Save 0.30–0.70% per transaction with proper data submission
Corporate cards represent 40–60% of B2B transaction volume
Meet procurement requirements for large enterprise customers
Automatic Level 2/3 data capture and submission
Seamless integration with your existing invoicing workflow

What Are Corporate Credit Cards?

Corporate credit cards (also called business cards, commercial cards, or purchasing cards) are payment cards issued by banks to businesses for company expenses, procurement, and B2B purchases. Unlike personal consumer cards, corporate cards have enhanced features designed for business use including detailed transaction data capture, spending controls, advanced reporting, and integration with accounting systems.

Corporate cards are issued in several types:

Corporate cards: Large company employee cards for travel and expenses
Purchasing cards (P-cards): Department-level cards for procurement and supplies
Business cards: Small business owner cards for company expenses
Fleet cards: Fuel and vehicle maintenance cards
Government cards: GSA SmartPay and other government purchasing cards

Why they cost more without optimization: Standard corporate card interchange rates are 0.30-0.70% higher than consumer cards because they carry higher risk and provide enhanced features. However, by submitting additional transaction data (Level 2 and Level 3), merchants can qualify for significantly lower interchange rates—often matching or beating consumer card rates.

Market size:

Corporate cards represent $500+ billion in annual spending in the U.S.
40–60% of B2B transactions use corporate or purchasing cards
Growing 8–10% annually as more businesses move away from checks
Essential for serving enterprise customers and government buyers
Required by many large companies’ procurement departments

Understanding Interchange Levels: Level 1, Level 2, and Level 3

Level 1 Processing (Basic Card-Present Data)

The most basic level of card processing—what you’d use for consumer transactions.

Data collected:

Cardholder name
Card number (transmitted as token)
Expiration date
Transaction amount
Merchant information
Authorization code

When Level 1 applies:

Most consumer credit card transactions
In-person retail purchases
Basic online transactions without enhanced data
When no additional transaction data is provided

Interchange rates:

Consumer cards: 1.51% + $0.10 to 2.95% + $0.10
Corporate cards at Level 1: 2.70% + $0.10 to 3.50% + $0.10
Corporate card premium: 0.50–1.00% higher than consumer rates

Why it’s expensive for B2B: Without enhanced data, corporate cards process at the highest possible rates because the transaction provides minimal information for the cardholder’s expense management and accounting systems.

Level 2 Processing (Commercial Card Data)

Enhanced processing with additional transaction data that qualifies for lower rates on corporate and purchasing cards.

Additional data required:

Customer code (buyer’s account number or ID)
Tax amount (separated from total transaction amount)
Tax indicator (taxable, non-taxable, tax-exempt status)
Purchase order number (PO number if applicable)
Merchant tax ID (seller’s tax identification number)
Destination ZIP code (shipping destination postal code)
Freight/shipping amount (separated if applicable)
Duty amount (import duties if applicable)

When Level 2 applies:

B2B transactions with commercial cards
Corporate purchasing cards
Business credit cards
Small business cards (some qualify)
Transactions over $1,000 typically

Interchange rate reduction:

Corporate cards at Level 2: 2.40% + $0.10 to 2.95% + $0.10
Savings vs Level 1: 0.30–0.55% per transaction
On a $5,000 transaction: Save $15–27.50

Example savings:

Monthly B2B volume: $250,000
Corporate card percentage: 50% = $125,000
Level 1 processing: $3,437.50 in fees (2.75% average)
Level 2 processing: $3,000 in fees (2.40% average)
Monthly savings: $437.50
Annual savings: $5,250

Level 3 Processing (Line-Item Detail)

The most detailed processing level with complete line-item data—qualifies for the lowest possible corporate card rates.

Additional data required (beyond Level 2):

Line-item details for each product/service:
- Product description or item name
- Product code, SKU, or item number
- Quantity purchased
- Unit of measure (each, dozen, box, etc.)
- Unit price or cost per item
- Extended amount (quantity × unit price)
- Discount amount per line (if applicable)
- Tax amount per line item
- Commodity code (for some industries)
- Item type or category

When Level 3 applies:

Large corporate purchases (typically $1,000+)
Government purchasing card (GSA SmartPay) transactions
Enterprise procurement systems
Fleet card purchases with detail
Any transaction requiring detailed expense reporting

Interchange rate reduction:

Corporate cards at Level 3: 2.20% + $0.10 to 2.50% + $0.10
Government cards at Level 3: As low as 1.35% + $0.05
Savings vs Level 1: 0.50–0.70% per transaction
Savings vs Level 2: 0.20–0.45% per transaction
On a $10,000 transaction: Save $50–70 vs Level 1

Example savings:

Monthly B2B volume: $500,000
Corporate card percentage: 60% = $300,000
Level 1 processing: $8,400 in fees (2.80% average)
Level 3 processing: $6,900 in fees (2.30% average)
Monthly savings: $1,500
Annual savings: $18,000

Interchange Level Comparison

Feature

Data Required

Consumer Cards

Corporate Cards

Government Cards

Best For

Implementation

Savings Potential

Level 1

Basic card info

1.51-2.95%

2.70-3.50%

Retail, consumer

Automatic

Baseline

Level 2

Tax, PO, customer code

Same as Level 1

2.40-2.95%

B2B, commercial

Moderate effort

0.30-0.55%

Level 3

Line-item detail

Same as Level 1

2.20-2.50%

1.35-1.95%

Enterprise, government

Most complex

0.50-0.70%

Benefits of Accepting Corporate Cards

Access Enterprise and Government Customers

Many large companies and government agencies require vendors to accept corporate cards.

Enterprise requirements:

Fortune 1000 companies often mandate card payments
Procurement departments have corporate card programs
Preferred payment method for accounts under $25,000
Faster payment than purchase orders and invoicing
Required for preferred vendor status

Government requirements:

Federal government: GSA SmartPay program (largest government payment card program)
State and local: Various purchasing card programs
Military: DoD-specific purchasing cards
Education: University purchasing cards
Level 3 data: Often required for compliance

Why it matters: If you don’t accept corporate cards or can’t provide Level 2/3 data, you may be excluded from bidding on contracts, lose out to competitors who do accept cards, face longer payment cycles (30-90 days vs. 1-2 days), or require costly separate billing processes.

Market access:

Federal government spending: $600+ billion annually
Corporate purchasing card market: $500+ billion annually
Growing preference for card payments over checks and ACH
Faster vendor onboarding when cards accepted
Competitive requirement for B2B sales

Improve Cash Flow Dramatically

Corporate cards provide faster payment than traditional B2B payment methods.

Payment timeline comparison:

Corporate cards:

Authorization: Instant
Settlement: 1-2 business days
Funds available: 2-3 business days
Total time: 2-3 days

Traditional invoicing/checks:

Invoice sent: Day 0
Payment terms: NET 30, NET 60, or NET 90
Check processing: 3-5 additional days
Check clearing: 3-7 additional days
Total time: 36-102 days

Purchase orders:

PO approval: 5-10 days
Invoice against PO: Day 0
Payment terms: NET 30-60
Payment processing: 3-7 days
Total time: 38-77 days

ACH transfers:

Invoice sent: Day 0
Payment terms: NET 30
ACH processing: 3-4 days
Total time: 33-34 days

Cash flow impact: A business processing $100,000 monthly in B2B sales:

Traditional NET 30 terms: $100,000 outstanding (30-day float)
Corporate cards: $0 outstanding (2-day float)
Working capital improvement: $100,000
Annualized value: Equivalent to 12x monthly revenue in eliminated receivables

Reduce Administrative Costs

Corporate cards streamline accounts receivable and reduce operational overhead.

Cost savings:

Eliminated processes:

No invoicing and invoice tracking
No collections calls for late payments
No accounts receivable aging management
No bad debt from non-payment
No payment reconciliation (auto-matched)
Reduced customer service inquiries

Time savings:

Manual invoicing: 15-30 minutes per invoice
Payment follow-up: 10-20 minutes per late payment
Payment reconciliation: 5-10 minutes per check
Collections activity: 30-60 minutes per delinquent account

Financial impact:

Average cost to process invoice: $15-40
Average cost to collect receivable: $25-100
Bad debt rate on invoicing: 2-5% of revenue
Write-offs and collections: 1-3% of revenue

Example savings:

100 monthly B2B transactions
Traditional invoicing cost: $1,500-4,000/month ($15-40 per invoice)
Collections cost: $500-2,000/month (20% late, $25-100 each)
Corporate card processing cost: $0 additional overhead
Savings: $2,000-6,000 monthly
Annual savings: $24,000-72,000

Eliminate Bad Debt and Payment Risk

Corporate cards guarantee payment and eliminate non-payment risk.

Payment guarantee:

Authorization = guaranteed payment (barring chargeback)
No risk of NSF or bounced checks
No risk of closed bank accounts (ACH)
No customer bankruptcy risk after shipment
No collections process needed

Bad debt rates:

Traditional B2B invoicing: 2-5% bad debt rate
Corporate cards: 0.1-0.3% (chargeback rate only)
Bad debt reduction: 93-98%

Chargeback protection:

Level 2/3 data provides strong dispute defense
Detailed transaction data proves delivery
Lower chargeback rates than consumer cards
Clear merchant terms reduce disputes

Example impact:

Annual B2B revenue: $2,000,000
Traditional bad debt rate: 3% = $60,000 written off
Corporate card chargeback rate: 0.2% = $4,000
Savings from eliminated bad debt: $56,000 annually

Meet Customer Expectations and Requirements

B2B buyers increasingly expect and require corporate card acceptance.

Buyer preferences:

65% of businesses prefer paying with cards for purchases under $10,000
Millennials and Gen Z business buyers expect card options
Procurement departments have card-first policies
Expense management systems integrate with cards
Approval workflows built around card payments

Competitive advantage:

Vendors accepting cards win more business
Faster sales cycle (no credit application)
Easier customer onboarding
Better customer experience
Differentiation from competitors

Lost business risk:

40% of buyers will switch vendors if cards not accepted
Enterprise RFPs often require card acceptance
Government contracts mandate card capability
Missing from consideration if no card option

Corporate Card Types and Requirements

Corporate Credit Cards (Large Enterprise)

Cards issued to employees of large corporations for business expenses.

Characteristics:

Issued by major banks (Amex, Chase, Citi, Bank of America)
Individual employee liability or company liability
Spending limits set by employer
Detailed expense reporting integration
Travel and entertainment focus

Common uses:

Business travel (flights, hotels, car rental)
Client entertainment and meals
Office supplies and equipment
Professional services and consulting
Software and subscription services
Conference and event registration

Data requirements:

Level 2 data minimum (tax, customer code)
Level 3 for large purchases ($5,000+)
Clear merchant descriptor for expense categorization
Itemized receipts for reconciliation

Interchange considerations:

Visa/Mastercard corporate: 2.40-2.95% (Level 2)
American Express corporate: 2.50-3.50%
Lower rates with Level 3 data
Detailed transaction data reduces disputes

Purchasing Cards (P-Cards)

Department-level cards for procurement, supplies, and operational purchases.

Characteristics:

Higher spending limits than individual cards
Department or project code assignment
Enhanced controls (merchant category restrictions)
Automatic approval workflows
Monthly or weekly reconciliation

Common uses:

Office supplies and stationery
Maintenance and repair supplies
Equipment and technology purchases
Professional services
Inventory and raw materials
Marketing and promotional items

Data requirements:

Level 3 data strongly preferred (line-item detail)
Product codes and descriptions
Quantity and unit pricing
Department or cost center codes
Tax detail per line item

Why Level 3 matters for P-cards:

Purchasing departments require detailed data
Accounting integration needs line-item detail
Budget tracking requires product-level info
Compliance and audit requirements
Buyer may reject transactions without proper data

Interchange rates:

Level 2: 2.40-2.95%
Level 3: 2.20-2.50%
Savings with Level 3: 0.20-0.45% per transaction

Government Purchasing Cards (GSA SmartPay)

Federal, state, and local government employee cards for official purchases.

GSA SmartPay program:

Largest government charge card program
$30+ billion annual spending
Strict compliance requirements
Level 3 data mandatory for most transactions
Detailed reporting requirements

Card types:

Purchase cards: Supplies and services under micro-purchase threshold
Travel cards: Official government travel
Fleet cards: Fuel and vehicle maintenance
Integrated cards: Combined purchase and travel

Data requirements:

Level 3 data required for optimal rates
Detailed line-item information
Commodity codes (UNSPSC or NAICS)
Tax exemption data
Delivery location information
Compliance with Federal Acquisition Regulations (FAR)

Interchange rates:

Level 1: 2.70-3.50% (non-compliant)
Level 2: 2.40-2.95%
Level 3: 1.35-1.95% (significantly lower)
Savings with Level 3: 0.75-1.55% per transaction

Why government cards are different:

Lowest interchange rates available (with Level 3)
Strict compliance requirements
Tax-exempt transactions common
Detailed audit trails required
Fast payment (typically 1-2 days)

Government vendor requirements:

Ability to process Level 3 data
Tax exemption handling
Detailed invoicing/receipts
Compliance documentation
Security clearances (for some contracts)

Small Business Credit Cards

Cards issued to small business owners and entrepreneurs.

Characteristics:

Owner personally liable (often)
Lower credit limits than corporate cards
Consumer-like benefits (rewards, cash back)
Personal and business expense mixing common
Simpler expense tracking

Common uses:

Business operating expenses
Inventory and supplies
Marketing and advertising
Equipment purchases
Professional services
Travel and transportation

Data requirements:

Basic Level 1 data often sufficient
Level 2 recommended for large purchases
Less stringent than corporate cards
Simpler receipt requirements

Interchange rates:

Often process at consumer card rates (1.51-2.95%)
Some cards qualify for Level 2 (2.40-2.95%)
Business cards from major issuers higher than consumer
Varies significantly by issuer and card product

Fleet Cards

Specialized cards for fuel, vehicle maintenance, and transportation expenses.

Characteristics:

Restricted to fuel and automotive purchases
Vehicle identification required
Odometer capture at point of sale
Driver ID or PIN required
Detailed fuel consumption reporting

Common uses:

Fuel purchases at gas stations
Vehicle maintenance and repairs
Car washes and detailing
Fleet management services
Tire and parts purchases

Data requirements:

Level 2 or Level 3 depending on card
Vehicle number or fleet ID
Driver ID
Odometer reading
Product codes (fuel type, oil, etc.)
Gallons/quantity purchased

Major fleet card programs:

WEX Fleet Cards
Voyager Fleet Cards
Fuelman Cards
Wright Express
Major oil company cards (BP, Shell, Exxon)

Interchange considerations:

Specialized interchange categories
Often lower rates than standard corporate
Require industry-specific data capture
Point-of-sale terminal compatibility important

How to Implement Level 2 and Level 3 Processing

Automatic Level 2/3 Data Capture

Coastal Pay’s intelligent gateway automatically captures and submits enhanced data.

How automatic capture works:

Customer completes purchase on your website or through invoice
Payment gateway detects corporate/purchasing card
System prompts for required Level 2/3 data fields
Customer or merchant enters additional information
Gateway automatically formats data per card network requirements
Enhanced data submitted with transaction for lower rates
Transaction qualifies for Level 2 or Level 3 interchange

What gets captured automatically:

Tax amount (calculated from transaction)
Merchant tax ID (configured in account)
Customer code (from customer record/invoice)
Purchase order number (if provided)
Destination ZIP code (from shipping address)
Product descriptions (from line items)
Quantities and unit prices (from cart)
Product codes/SKUs (from inventory system)

Benefits of automatic capture:

No manual data entry for each transaction
Consistent data format (meets network requirements)
Maximizes qualification rates
Reduces errors and downgrades
Works with existing checkout flow
Transparent to customer experience

Integration with E-commerce and Invoicing Systems

Seamless Level 2/3 data capture from your existing business systems.

E-commerce platform integration:

Supported platforms:

Shopify (Level 2/3 via Coastal Pay integration)
WooCommerce (plugin with L2/L3 support)
Magento (extension available)
BigCommerce (native support)
Custom platforms (API integration)

Data sourced from cart:

Line items → Product descriptions, SKUs, quantities, prices
Shipping address → Destination ZIP code
Customer account → Customer code/ID
Order number → Purchase order number
Tax calculation → Separate tax amounts
Shipping cost → Freight amount

Invoicing system integration:

Supported systems:

QuickBooks (desktop and online)
Xero
FreshBooks
Zoho Invoice
Custom invoicing systems (API)

Data sourced from invoice:

Invoice line items → Level 3 line detail
Customer account → Customer code
Terms → Payment terms reference
Invoice number → Transaction reference
Job/project code → Department/cost center
Tax details → Tax amounts per line

ERP and accounting integration:

Supported systems:

SAP
Oracle NetSuite
Microsoft Dynamics
Sage Intacct
Custom ERP systems

Data flow:

ERP creates sales order → Captures Level 3 data
Payment processed via Coastal Pay → Enhanced data submitted
Transaction result → Posted back to ERP
Reconciliation → Automatic matching
Reporting → Consolidated financial reporting

Manual Level 2/3 Data Entry

For businesses without integrated systems, manual data entry ensures qualification.

Virtual terminal entry:

Process payment via web-based terminal
Additional fields displayed for corporate cards
Merchant enters required L2/L3 data
System validates data completeness
Transaction processes with enhanced data

Required fields (Level 2):

Customer code or account number
Purchase order number (if applicable)
Tax amount (separated from total)
Tax indicator (taxable/non-taxable/exempt)
Destination ZIP code
Freight/shipping amount (if applicable)

Required fields (Level 3, additional):

Line-item details for each product:
- Product description
- Product code/SKU
- Quantity
- Unit price
- Extended amount
- Line tax amount

Best practices:

Create data collection checklist
Train staff on required fields
Use customer/product templates
Validate data before submission
Review qualification reports monthly

API Integration for Developers

Full programmatic control over Level 2/3 data submission.

API capabilities:

Submit complete Level 3 data structure
Support for multiple line items (up to 99)
Flexible data format (JSON/XML)
Real-time validation responses
Qualification status returned
Detailed error messaging

Example API structure:

JSON

{
    "amount": 5000.00,
    "currency": "USD",
    "payment_method": "card_token_abc123",
    "level_2_data": {
        "customer_code": "CUST12345",
        "tax_amount": 400.00,
        "tax_exempt": false,
        "purchase_order": "PO-2024-001",
        "destination_zip": "94105",
        "ship_from_zip": "10001"
    },
    "level_3_data": {
        "line_items": [
            {
                "description": "Laptop Computer - Dell XPS 15",
                "product_code": "DELL-XPS15-I7",
                "quantity": 2,
                "unit_of_measure": "EA",
                "unit_price": 1999.99,
                "extended_amount": 3999.98,
                "tax_amount": 320.00,
                "discount_amount": 0.00
            },
            {
                "description": "Laptop Bag",
                "product_code": "BAG-LP-001",
                "quantity": 2,
                "unit_of_measure": "EA",
                "unit_price": 49.99,
                "extended_amount": 99.98,
                "tax_amount": 8.00,
                "discount_amount": 10.00
            }
        ],
        "freight_amount": 50.00,
        "duty_amount": 0.00,
        "ship_to_address": {
            "street": "123 Market St",
            "city": "San Francisco",
            "state": "CA",
            "zip": "94105",
            "country": "US"
        }
    }
}

API integration benefits:

Complete control over data submission
Support for complex product catalogs
Integration with any business system
Custom data mapping logic
Real-time qualification feedback

Qualification Monitoring and Optimization

Track your Level 2/3 qualification rates and optimize for maximum savings.

Qualification reporting:

Transaction-level qualification status
Percentage qualified by period
Downgrade reason analysis
Savings calculation
Trend reporting

Common downgrade reasons:

Missing customer code or PO number
Incorrect tax amount format
Missing line-item descriptions
Product code not provided
Destination ZIP code missing or invalid
Data submitted after authorization window

Optimization strategies:

Review downgrade reports monthly
Identify missing data patterns
Update data collection processes
Train staff on requirements
Enhance system integrations
Test data submission formats

Target qualification rates:

Good: 70–80% of corporate card volume at Level 2/3
Excellent: 85–95% qualification
Best-in-class: 95%+ qualification

ROI of optimization:

Improving from 70% to 95% qualification
On $500K monthly corporate card volume
Average 0.40% rate reduction when qualified
Additional savings: $475/month = $5,700/year

Corporate Card Processing Rates and Fees

Understanding Corporate Card Interchange

Corporate card interchange rates vary significantly based on data provided and card type.

Visa corporate card interchange examples:

Visa Corporate (Level 1 - Minimum data):

Rate: 2.95% + $0.10
Typical for retail or card-not-present with basic data
Highest corporate interchange rate

Visa Corporate (Level 2 - Enhanced data):

Rate: 2.40% + $0.10
Requires tax amount, customer code, etc.
Savings: 0.55% vs Level 1

Visa Corporate (Level 3 - Line-item detail):

Rate: 2.30% + $0.10
Requires full line-item data
Savings: 0.65% vs Level 1, 0.10% vs Level 2

Mastercard corporate card interchange examples:

Mastercard Corporate (Level 1):

Rate: 2.95% + $0.10
Basic transaction data only

Mastercard Corporate (Level 2):

Rate: 2.45% + $0.10
Enhanced commercial data
Savings: 0.50% vs Level 1

Mastercard Corporate (Level 3):

Rate: 2.35% + $0.10
Full line-item detail
Savings: 0.60% vs Level 1

Government card interchange (Visa/Mastercard):

Government Card (Level 1):

Rate: 2.95% + $0.10
Non-compliant processing

Government Card (Level 2):

Rate: 2.40% + $0.10
Enhanced data provided
Savings: 0.55% vs Level 1

Government Card (Level 3):

Rate: 1.35% + $0.05
Full Level 3 compliance
Savings: 1.60% vs Level 1, 1.05% vs Level 2
Lowest interchange rate available

American Express corporate cards:

American Express uses a different rate structure:

American Express Corporate:

Discount rate: 2.50–3.50% (varies by merchant agreement)
No separate interchange/assessment structure
Level 2/3 data can improve rates (negotiable)
Flat-rate pricing more common
Direct merchant agreement with Amex required

Total Cost of Corporate Card Acceptance

Cost components:

Interchange (largest component):

Set by card networks (Visa, Mastercard)
Varies by card type and data level
Non-negotiable (must be paid)
Corporate cards: 1.35–3.50%
Consumer cards: 1.51–2.95%

Assessment fees:

Network fees (Visa/Mastercard/Amex)
Typically 0.13–0.15%
Applied to all transactions
Non-negotiable

Processor markup:

Coastal Pay’s transparent fee
Added to interchange (interchange-plus pricing)
Negotiable based on volume
Example: 0.30% + $0.10 per transaction

Total example (Level 2 corporate card):

Interchange: 2.40%
Assessment: 0.13%
Processor markup: 0.30% + $0.10
Total effective rate: 2.83% + $0.10

Total example (Level 3 corporate card):

Interchange: 2.30%
Assessment: 0.13%
Processor markup: 0.30% + $0.10
Total effective rate: 2.73% + $0.10
Savings vs Level 1: 0.52%

Corporate Card Processing Savings Calculator

Example calculation for B2B business:

Business profile:

Monthly B2B transaction volume: $500,000
Corporate card percentage: 60% = $300,000
Current processing: Level 1 (basic data)
Target processing: Level 2/3 (enhanced data)

Current costs (Level 1):

Average corporate interchange: 2.95%
Assessment fees: 0.13%
Processor markup: 0.30% + $0.10
Total effective rate: 3.38% + $0.10
Monthly cost on $300K: $10,170

Optimized costs (Level 2/3):

Average corporate interchange: 2.35% (Level 3 mix)
Assessment fees: 0.13%
Processor markup: 0.30% + $0.10
Total effective rate: 2.78% + $0.10
Monthly cost on $300K: $8,370

Monthly savings: $1,800

Annual savings: $21,600

ROI on implementation: Infinite (no additional cost for Coastal Pay's automatic L2/3)

Larger enterprise example:

Business profile:

Monthly B2B volume: $2,000,000
Corporate card: 70% = $1,400,000
Government card: 10% = $200,000
Consumer/small business: 20% = $400,000

Savings breakdown:

Corporate cards ($1.4M):

Level 1 cost: $47,320 (3.38% average)
Level 2/3 cost: $38,920 (2.78% average)
Savings: $8,400/month

Government cards ($200K):

Level 1 cost: $6,760 (3.38% average)
Level 3 cost: $3,060 (1.53% average)
Savings: $3,700/month

Total monthly savings: $12,100

Annual savings: $145,200

Pricing Transparency: Interchange-Plus vs. Tiered

Why interchange-plus pricing matters for B2B:

Interchange-plus (Coastal Pay model):

You see exact interchange cost
Processor markup clearly separated
Benefit directly from L2/3 qualification
Transparent pricing
Lower total cost

Example Level 3 transaction:

Interchange: 2.30%
Processor markup: 0.30% + $0.10
You pay: 2.60% + $0.10
You see the 0.65% savings vs Level 1

Tiered pricing (what many processors use):

“Qualified,” “Mid-Qualified,” “Non-Qualified” tiers
Corporate cards often forced to higher tiers
No benefit from L2/3 data (or minimal)
Opaque pricing structure
Higher effective rates

Example on tiered pricing:

“Qualified” rate: 2.49%
Corporate cards bumped to “Mid-Qualified”: 3.49%
Or “Non-Qualified”: 3.99%
Even with L2/3 data, you don’t see savings
You lose 0.50–1.00% in hidden markup

Why this matters: On $300K monthly corporate card volume:

Example on tiered pricing:

Interchange-plus with L2/3: $8,370 (2.78% + $0.10)
Tiered with corporate in “Mid-Qual”: $10,770 (3.59%)
Hidden cost: $2,400/month = $28,800/year

Corporate Card Processing for Different Industries

B2B Wholesale and Distribution

Wholesalers and distributors see massive savings from Level 3 processing.

Why Level 3 is critical:

Large order values ($5,000–$50,000+)
Detailed product catalogs
Multiple SKUs per order
Quantity-based pricing
Freight and shipping charges
Regular corporate card usage

Typical transaction:

Order value: $15,000
20 line items
Freight: $500
Corporate purchasing card used
Level 1 cost: $506.50 (3.38%)
Level 3 cost: $417.50 (2.78%)
Savings per transaction: $89

Implementation:

Integrate with ERP/order management
Capture SKUs, descriptions, quantities automatically
Include freight/shipping separately
Customer PO number on all orders
Destination ZIP from shipping address

Expected results:

85–95% L3 qualification rate
0.50–0.70% savings per transaction
$500–2,000 monthly savings per $100K volume
Fast ROI (immediate with Coastal Pay)

Professional Services and Consulting

Service businesses benefit from Level 2 data even without physical products.

Service business use cases:

Consulting projects
Legal services
Accounting and bookkeeping
Marketing and advertising agencies
IT services and support
Engineering and architecture

Level 2 for services:

Customer/client code (matter number, project ID)
Tax amount (sales tax on services if applicable)
Purchase order number (if client provides)
Service description (consulting, legal, design, etc.)
Project or cost center code

Typical transaction:

Monthly retainer: $10,000
Corporate card payment
Level 1 cost: $338.10
Level 2 cost: $288.10
Savings: $50 per transaction

Implementation tips:

Add custom fields to invoices
Client account number = customer code
Matter/project number = reference
Detailed service descriptions
Tax handling for taxable/exempt services

Technology and Software (B2B SaaS)

SaaS companies with enterprise customers benefit from optimized corporate card processing.

Enterprise SaaS characteristics:

Annual contracts: $10,000–$100,000+
Monthly subscriptions: $500–$10,000
Corporate purchasing cards common
Usage-based billing
Multi-year agreements

Level 2 for SaaS:

Customer account ID (company identifier)
Subscription period (description)
Tax amount (software sales tax by state)
PO number (if enterprise requires)
Department/cost center (if provided)

Annual subscription example:

Annual fee: $50,000
Corporate card processing
Level 1 cost: $1,690.10
Level 2 cost: $1,390.10
Savings: $300
On 100 annual contracts: $30,000 saved annually

Implementation:

Billing system integration
Customer account mapping
PO number collection at signup
Tax calculation by jurisdiction
Automated data submission

Manufacturing and Industrial Equipment

Large equipment purchases and B2B supplies ideal for Level 3 processing.

Manufacturing transactions:

Equipment sales: $25,000–$500,000
Spare parts and components
Raw materials and supplies
Maintenance and repair parts
Tooling and fixtures

Level 3 requirements:

Detailed part numbers
Quantities and units of measure
Unit prices and extensions
Equipment serial numbers
Warranty information
Installation/freight charges

Large purchase example:

Equipment: $100,000
Installation: $5,000
Shipping: $2,000
Total: $107,000
Level 1 cost: $3,617 (3.38%)
Level 3 cost: $2,975 (2.78%)
Savings: $642 per transaction

Strategic benefit:

Compete with financing companies
Faster payment than traditional invoicing
Reduced credit risk
Lower administrative costs
Better cash flow for working capital

Healthcare and Medical Supplies

Medical suppliers and equipment vendors benefit from Level 3 on B2B sales.

Medical/healthcare B2B:

Medical supplies to hospitals
Equipment sales to practices
Pharmaceutical distribution
Laboratory supplies
Medical devices and parts

Level 3 advantages:

Detailed product codes (NDC, UPC, item numbers)
Lot numbers and expiration tracking
Quantity and unit pricing
Department/cost center allocation
Compliance documentation

Purchase example:

Medical supplies order: $8,000
30 line items
Corporate purchasing card
Level 1 cost: $270.40
Level 3 cost: $222.40
Savings: $48

Compliance considerations:

HIPAA-compliant payment processing
Detailed audit trails
Lot tracking integration
Expiration date management
Electronic record keeping

Government Contractors

Government sales require Level 3 processing for optimal rates and compliance.

Government contracting:

Federal contracts (GSA Schedule)
State and local procurement
Education (K-12, universities)
Military and defense
Public works and infrastructure

GSA SmartPay requirements:

Level 3 data mandatory
Commodity codes required
Tax exemption documentation
Detailed line-item data
Electronic record retention

Government purchase example:

Purchase amount: $20,000
GSA SmartPay card
Level 1 cost: $676.10 (3.38%)
Level 3 cost: $306.10 (1.53%)
Savings: $370 per transaction
On $500K annual government sales: $9,250 saved

Compliance requirements:

FAR compliance (Federal Acquisition Regulations)
Proper tax exemption handling
Detailed documentation
Electronic invoicing capability
GSA Advantage integration (if applicable)

Corporate Card Processing Best Practices

Maximize Level 2 and Level 3 Qualification

Data collection strategies:

At point of sale/checkout:

Detect corporate card type automatically
Display required data fields conditionally
Pre-populate from customer account
Validate data before submission
Provide clear field labels and help text

From customer:

Request PO number during checkout
Collect customer/account number at registration
Ask for department/cost center if applicable
Confirm tax exemption status
Capture project/matter codes

From your systems:

Pull customer code from CRM/accounting
Extract line items from cart/invoice
Calculate tax amounts separately
Include shipping cost breakdown
Add product descriptions and SKUs automatically

Data validation:

Verify required fields present
Check data format compliance
Validate ZIP codes and addresses
Confirm tax calculation accuracy
Test submission before production

Common mistakes to avoid:

Missing data elements:

No customer code provided = downgrade
Tax amount not separated = downgrade
Missing product codes = downgrade to Level 2
No line-item descriptions = downgrade to Level 2
Destination ZIP incorrect format = downgrade

Data format errors:

Tax amount in wrong field
Customer code too long (max 17 characters)
Product code exceeds length limit
Special characters not escaped properly
Currency format incorrect

Timing issues:

Data submitted after authorization window
Delayed batch settlement loses L3 qualification
Data not included with original authorization
Separate data submission failed

Process issues:

Staff not trained on requirements
System integration incomplete
Data mapping errors
No qualification monitoring
No review of downgrade reports

Staff Training and Process Documentation

Training topics:

For customer service/sales:

Why L2/3 data matters (lower costs, customer requirements)
Which fields are required
How to request information from customers
What to do if data is missing
How to use virtual terminal L2/3 fields

For operations/fulfillment:

Importance of accurate product codes
Proper line-item descriptions
Quantity and unit pricing accuracy
Freight/shipping cost separation
Data validation before processing

For accounting/finance:

How to review qualification reports
Understanding downgrade reasons
Savings calculation
Reconciliation with L2/3 data
Tax compliance for B2B

Documentation:

Written procedures for data collection
Field mapping reference guide
Customer communication templates
Troubleshooting common issues
Contact information for support

Customer Communication

Setting expectations:

At signup/onboarding:

Inform customers you accept corporate cards
Explain benefits (fast payment, detailed data)
Request account/customer codes
Collect PO number requirements
Establish data exchange process

During transaction:

Clear field labels for required data
Help text explaining why data needed
Error messages with correction guidance
Confirmation of data received
Receipt with detailed transaction data

Ongoing:

Include payment terms in contracts
Provide detailed invoices with L3 data
Send itemized digital receipts
Make transaction history available
Respond promptly to payment inquiries

Corporate Card Processing Technology

Payment Gateway Features for B2B

Coastal Pay Gateway L2/3 capabilities:

Automatic card type detection:

Identifies corporate vs consumer cards
Determines Level 2/3 eligibility
Shows appropriate data fields
Optimizes qualification rate
Real-time interchange estimation

Smart data capture:

Conditional field display
Pre-population from customer records
Intelligent defaults
Validation before submission
Error checking and correction prompts

Multi-format support:

Web checkout integration
Invoice payment processing
API for custom systems
Virtual terminal entry
Batch upload capability

Qualification reporting:

Transaction-level qualification status
Percentage qualified by period
Downgrade reason analysis
Savings calculation
Trend reporting

Integration Options

E-commerce platforms:

Shopify with L2/3 extension
WooCommerce B2B plugin
Magento B2B Commerce
BigCommerce B2B Edition
Custom cart integration via API

Invoicing/billing systems:

QuickBooks Online/Desktop
Xero
FreshBooks
Zoho Invoice
Bill.com
Custom invoicing via API

ERP systems:

SAP Business One
Oracle NetSuite
Microsoft Dynamics 365
Sage Intacct
Epicor
Custom ERP via API

Procurement systems:

Coupa integration
Ariba Network
SAP Fieldglass
Oracle Procurement Cloud
Custom procurement via API

API Capabilities

RESTful API features:

Complete L2/3 data submission
Up to 99 line items per transaction
Real-time authorization and capture
Qualification status in response
Detailed error messaging
Webhook notifications

Supported operations:

Complete L2/3 data submission
Up to 99 line items per transaction
Real-time authorization and capture
Qualification status in response
Detailed error messaging
Webhook notifications

Data format:

JSON (primary)
XML (supported)
CSV (batch import)
NACHA (for ACH integration)
Custom formats (via transformation)

Corporate Card Processing FAQ

What are corporate credit cards?

Corporate credit cards are payment cards issued by banks to businesses for company purchases and employee expenses. Unlike personal consumer credit cards, corporate cards have enhanced features including detailed transaction reporting, spending controls, integration with accounting systems, and qualification for Level 2/Level 3 interchange rates when proper data is submitted. Corporate cards include large company employee cards, purchasing cards (P-cards), small business cards, government cards, and fleet cards. They represent 40-60% of B2B transaction volume and over $500 billion in annual spending.

Why do corporate cards cost more to process?

Corporate cards have higher interchange rates than consumer cards (2.70-3.50% vs 1.51-2.95%) because they carry higher risk, provide enhanced features like detailed reporting, and have longer float periods (time between authorization and settlement). Banks price corporate cards higher due to rewards programs, extended payment terms given to corporate customers, and additional expense management services. However, merchants can qualify for significantly lower rates (down to 1.35% for government cards) by submitting Level 2 or Level 3 enhanced transaction data.

What is Level 2 processing?

Level 2 processing submits enhanced commercial transaction data beyond basic card information to qualify for lower corporate card interchange rates. Required data includes customer code/account number, tax amount separated from total, purchase order number (if applicable), merchant tax ID, and destination ZIP code. Level 2 processing typically reduces corporate card rates by 0.30-0.55% compared to Level 1 (basic) processing. It’s required for most B2B transactions to achieve reasonable processing costs on corporate purchasing cards.

What is Level 3 processing?

Level 3 processing provides the most detailed transaction data including complete line-item detail for every product or service purchased. In addition to Level 2 data, Level 3 requires product descriptions, product codes/SKUs, quantities, units of measure, unit prices, extended amounts, and line-item tax amounts for each item. Level 3 processing achieves the lowest possible corporate card interchange rates—often 0.50-0.70% lower than Level 1 and 0.20-0.45% lower than Level 2. Government purchasing cards (GSA SmartPay) require Level 3 data and offer the lowest rates available (as low as 1.35%).

How much can I save with Level 2 and Level 3 processing?

Savings depend on your monthly corporate card volume and current processing level. Typical savings are 0.30-0.55% per transaction with Level 2 data and 0.50-0.70% with Level 3 data (1.00-1.60% for government cards). Example: A business processing $300,000 monthly in corporate card transactions saves approximately $1,500-2,100/month ($18,000-25,200 annually) by implementing Level 3 processing versus basic Level 1 processing. Larger B2B businesses processing $1-2 million monthly can save $60,000-150,000 annually.

Do I need special equipment for corporate card processing?

No special equipment is needed for corporate card processing. You can accept corporate cards with the same payment terminals, e-commerce platforms, and systems you use for consumer cards. However, you need a payment gateway (like Coastal Pay) that supports Level 2 and Level 3 data capture and submission. For in-person payments, any EMV-capable terminal works. For online/invoicing, you need software integration that collects and submits the enhanced data required for Level 2/3 qualification. Coastal Pay provides automatic Level 2/3 data capture in our gateway at no additional cost.

How does Coastal Pay automate Level 2 and Level 3 processing?

Coastal Pay’s intelligent payment gateway automatically detects corporate cards, captures required Level 2/3 data from your e-commerce cart or invoicing system, formats data according to card network requirements, submits enhanced data with each transaction, and reports qualification status and savings. Our system integrates with major e-commerce platforms (Shopify, WooCommerce, Magento), invoicing systems (QuickBooks, Xero), and ERP systems, or works via our API for custom integrations. The automation is included at no additional cost—you simply pay lower interchange rates when transactions qualify.

What data do I need to collect for Level 2 qualification?

For Level 2 qualification, you must submit: customer code or account number (your internal identifier for the buyer), tax amount separated from the transaction total, tax exempt indicator if applicable, purchase order number (if provided by customer), merchant tax identification number, destination ZIP code (where goods/services delivered), and freight/shipping amount if applicable. Most of this data comes from your existing customer records, invoicing system, or checkout process and can be captured automatically by properly integrated payment systems.

What data do I need for Level 3 qualification?

Level 3 requires all Level 2 data plus detailed line-item information for each product or service: product description or name, product code/SKU/item number, quantity purchased, unit of measure (each, box, hour, etc.), unit price, extended amount (quantity × price), discount per line item (if any), tax amount per line item, and commodity code for some industries/transactions. This data typically comes from your shopping cart, invoice line items, or order management system and can be submitted automatically through proper integration.

Do all corporate cards qualify for Level 2 and Level 3 rates?

Most corporate, purchasing, and government cards qualify for Level 2/3 rates, but requirements vary by card type and issuing bank. Visa and Mastercard corporate cards, purchasing cards, business cards from major issuers, and GSA SmartPay government cards all qualify. Small business cards may or may not qualify depending on the specific card product. Consumer cards do not benefit from Level 2/3 data (they already process at lower rates). Your payment gateway should automatically detect which cards qualify and collect appropriate data. Coastal Pay provides real-time qualification status for each transaction.

Can I use Level 2/3 processing for consumer cards?

While you can submit Level 2/3 data for consumer credit cards, it doesn’t reduce your processing costs because consumer cards already have lower interchange rates (1.51-2.95%) that don’t vary based on transaction data. Level 2/3 processing is specifically designed for commercial, corporate, purchasing, and government cards which have higher base rates (2.70-3.50%) that are reduced when enhanced data is provided. However, submitting detailed transaction data for all cards (consumer and corporate) can provide benefits like better record-keeping, fraud prevention, and customer service.

How long does it take to implement Level 2/3 processing?

Implementation time depends on your integration method. E-commerce platform plugins (Shopify, WooCommerce) can be configured in 1-3 days including testing. Invoicing system integration (QuickBooks, Xero) takes 3-7 days. Custom API integration for proprietary systems takes 1-3 weeks. Virtual terminal manual entry can start immediately (same day). Most businesses are processing with Level 2/3 qualification within 1-2 weeks. Coastal Pay provides integration support and testing assistance throughout the implementation process.

What happens if I don't provide all the required data?

Transactions without complete Level 2 or Level 3 data will “downgrade” to a higher interchange rate. Missing a few fields typically downgrades Level 3 to Level 2 (costing you 0.10-0.30% more). Missing Level 2 data entirely downgrades to Level 1 (costing 0.30-0.70% more). The transaction still processes successfully, but you pay the higher rate. Coastal Pay provides detailed downgrade reports showing which transactions didn’t qualify and why, so you can fix data collection issues and improve qualification rates over time. Target 85-95% qualification rate for optimal savings.

Do I need Level 3 data for all B2B transactions?

Level 3 data is most beneficial for large B2B transactions (typically $1,000+), government purchasing card transactions (often required), complex orders with multiple line items, customers requiring detailed expense reporting, and industries like wholesale/distribution, manufacturing, or equipment sales. For small B2B transactions under $500, Level 2 data may provide sufficient savings with less complexity. Service businesses without physical products can benefit from Level 2 even without line-item detail. Evaluate based on your average transaction size, corporate card percentage, and implementation effort versus savings.

Can I accept corporate cards without submitting Level 2/3 data?

Yes, you can accept corporate cards using basic Level 1 processing, but you’ll pay significantly higher rates (2.70-3.50% vs 1.35-2.95% with Level 2/3). This makes sense only if your corporate card volume is very low (under $10,000/month), your average transaction size is small (under $300), implementation complexity outweighs savings, or you’re accepting cards temporarily/infrequently. For most B2B businesses, the savings from Level 2/3 processing ($500-5,000+ monthly) far exceed any implementation effort, especially with Coastal Pay’s automatic data capture.

How do I know if my transactions are qualifying for Level 2/3?

Coastal Pay provides detailed qualification reporting showing the percentage of corporate card transactions qualifying for Level 1, Level 2, and Level 3 rates, reasons for downgrades (missing fields), potential savings from full qualification, and transaction-level qualification status. You can access reports through the merchant portal, receive monthly qualification summaries via email, and review individual transactions to see exactly which data was submitted and accepted. We also provide alerts when qualification rates drop below targets so you can address data collection issues quickly

Does Level 2/3 processing work with ACH payments?

No, Level 2 and Level 3 processing applies only to credit and debit card transactions processed through the Visa, Mastercard, American Express, and Discover networks. ACH (bank transfer) payments don’t use the interchange system and already have much lower rates (typically 1% vs 2.5-3.5% for cards). For B2B customers, you might offer both options: corporate cards with Level 2/3 data for transactions under $5,000-10,000 (faster payment, competitive rates), and ACH for larger transactions where the 1% ACH rate beats even Level 3 card rates. Many B2B businesses find the optimal mix is cards for speed and ACH for large amounts.

What if my customer doesn't provide a PO number?

Purchase order numbers are helpful for Level 2 qualification but not always required. If your customer doesn’t have or won’t provide a PO number, you can still qualify for Level 2/3 rates by submitting the other required data (customer code, tax amount, destination ZIP, line items, etc.). Use your internal order number, invoice number, or project code as a reference instead. Some businesses generate their own reference numbers to track transactions. The PO number field helps with customer reconciliation but isn’t always mandatory for rate qualification—focus on the consistently available data fields first.

Can I pass corporate card fees to customers through surcharging?

Surcharging (adding a fee to card transactions) is legal in most states and can help offset processing costs, but there are important considerations for corporate cards. Card network rules limit surcharges to your actual cost of acceptance (typically 2.5-4%), must be disclosed clearly before purchase, cannot exceed actual processing cost, and cannot apply to debit cards. Many B2B businesses avoid surcharging because corporate customers may object, it complicates pricing, competitors may not surcharge (competitive disadvantage), and customers may switch to ACH or check payments. Consider offering cash/ACH discounts instead, which are legal everywhere and better received.

How does corporate card processing affect cash flow?

Corporate card processing dramatically improves cash flow compared to traditional B2B payment methods. Corporate cards settle in 1-2 business days (vs 30-90 days for invoicing), eliminate accounts receivable float, provide guaranteed payment (no bad debt risk), reduce collections effort and costs, and improve working capital. Example: A business with $500,000 monthly B2B sales on NET 30 terms has $500,000 in outstanding receivables at any time. Switching to corporate cards reduces this to near-zero, freeing up $500,000 in working capital—equivalent to a $500,000 interest-free loan. The faster cash flow often exceeds the value of processing fee savings.

What's the difference between corporate cards and small business cards?

Corporate cards are issued to large companies with many employees, have company liability (not personal), include detailed expense controls and reporting, qualify for Level 2/3 rates with proper data, and are used for $10,000-$100,000+ monthly spending. Small business cards are issued to small business owners, often have personal guarantee from owner, have simpler reporting and fewer features, sometimes qualify for Level 2 (not always Level 3), and typically used for $1,000-$10,000 monthly spending. Processing-wise, small business cards may process at consumer rates or corporate rates depending on the specific card product. Submit Level 2 data for all business cards to maximize savings.

Get Started with Corporate Card Processing

Save $500-$5,000+ Monthly on B2B Transaction Processing

Stop overpaying on corporate card transactions. Coastal Pay’s automatic Level 2 and Level 3 processing qualifies your B2B payments for the lowest possible interchange rates—saving you 0.30-0.70% per transaction with zero additional effort.

What happens next:

Free rate analysis on your current corporate card processing costs
Savings calculation showing your potential monthly/annual savings
Simple integration with your existing systems (e-commerce, invoicing, ERP)
Automatic Level 2/3 data capture and submission (no manual work)
Start saving immediately on every corporate card transaction

Questions About Corporate Card Processing?

Our B2B payment specialists can analyze your current processing costs, calculate potential savings from Level 2/3 optimization, and design an implementation plan for your specific business systems.

No sales pressure. No obligation. Just expert B2B payment guidance.

Phone: 888 266 1715 (Mon-Fri 8am-8pm ET)
Email: b2b@coastalpay.com
Live Chat: Available on our website
Free Rate Analysis: Upload statement for savings calculation
Resources: Level 2/3 implementation guides