The interchange fees associated with commercial card acceptance are the latest target of commercial card optimization company Revolution Payments, which announced a new service designed to further reduce that burden on business-to-business (B2B) suppliers.
In a press release Wednesday (Dec. 11), Revolution Payments announced its interchange optimization service to help B2B companies reduce interchange fees by optimizing Level 3 data processing.
Level 3 data is an elevated level of information about a transaction, which can lower interchange fees compared to processing that only involves Level 2 or Level 1 data. It is believed that by expanding accessibility of data about a transaction, transaction risks are mitigated, thus negating the need for card issuers to charge higher fees to cover the costs of that risk.
Revolution Payments' new service enhances transaction data capabilities to achieve Level 3 processing, while the company keeps half of the reduction of those interchange costs. Revolution Payments said the service could lower interchange fees for suppliers by up to 40 percent.
The company also highlighted the ability for the service to support lower interchange fee and Level 3 processing for businesses that use credit card terminals, which have historically been unable to support that additional data required to achieve Level 3 processing. The service works for card transactions flowing through the First Data or Elavon networks.
Revolution Payments first announced its Level 3 processing capabilities earlier this year.
But it's not the only company working to achieve Level 3 processing in an effort to reduce the interchange fee burden on B2B vendors.
Earlier this year PayTrace Chief Executive Officer Scott Judkins spoke with PYMNTS about the challenges of card acceptance and associated fees.
“As companies move toward credit card processing, the costs they focus on, and … new to them as they make the shift, is the interchange,” he said, pointing to the high costs associated with even 1 or 2 percent fees on high-value transactions of $10,000 or more, typical for a B2B transaction.