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B2B Processing 101

Updated: Jan 29



At Tandem, we service a number of both business-to-consumer (B2C) and business-to-business (B2B) merchants. While some needs are the same across the board, like the need for ultra-fast payment processing, other needs are more specific to the type of business being served. Today, we’ll talk more about the three levels of payment processing and why Level 2 and Level 3 are so important for our B2B partners.


Level-1 Level 1 processing is preferred by most B2C operations, like restaurants and retail. Little information is required to process transactions – only the merchant’s name, transaction amount, and date. This type of processing has the highest interchange rates at up to 3.25 percent.


A virtual terminal, which allows you to input credit card and payment information online, will enable Level 2 and Level 3 payment processing.


Level-2 Level 2 is one type of processing preferred by B2B businesses. Unlike Level 1 processing, which captures only cardholder data, Level 2 requires the input of merchant codes and tax information as well. It is geared for the big-ticket invoices often paid in B2B relationships, with significantly lower interchange rates – you may save as much as

50 percent!


Level-3 Level 3 is the other type of processing preferred by B2B operations. Like Level 2, it is designed for big-ticket invoices like those used in B2B relationships. In addition to the information required in Level 1 and Level 2, Level 3 also provides line item details: item description, quantity and product codes, and shipping and freight costs. Level 3 boasts reduced interchange rates like Level 2, with a reduction of up to 50 percent. Additionally, for transactions over $5,000, Level 3 processing provides extra savings. There is a commonly held misconception that enrolling in Level 3 processing will cost you an arm and a leg. Not anymore! When the program was first rolled out several years ago, Visa and MasterCard charged steep startup fees. But once they realized it served as a major barrier for entry, they did away with all fees. Level 3 is now a completely free program! With Tandem, you won’t even have to spend money on a more advanced terminal for your business – we provide our merchant partners with a free virtual/web-based terminal. It’s quick and painless.


If you operate a B2B business, Level 2 and Level 3 processing will save you big on interchange rates – no ifs, ands, or buts about it. Tandem is committed to a higher standard of professionalism and integrity within the payments ecosystem. We believe

that credit and debit card processing should never be a fuzzy number on your monthly statement, and it’s our commitment to finding the right payment solutions for you that differentiate us from the competition. Visit https://www.tandempayment.com/ today to get started.