As with all credit card transactions, the data is the focus. This leads to increased transparency, prevents fraud and remains a cornerstone to enable businesses track on their sales. However when dealing with different tiers of data in credit card operations, the terms and names may be quite misleading. Of these, one is Level 2 data, which describes transaction details beyond a simple credit card payment.

What is Level 2 Data?

Credit card transactions are sometimes divided into several tiers based on how much information is given in the transaction record. The credit card Level 2 data is a summary of additional transaction data beyond the authorization information and includes merchant name, amount of the transaction, or card number. This additional information assists operating businesses to make transactions more efficiently and is useful for meeting certain compliance standards.

Why is Level 2 Data Important?

By analysing Level 2 data, the following benefits can be highlighted, and they are especially important for businesses. Level 2 data might be helpful for tax purposes, such as for counting shareholders or calculating taxes which business must pay for its turnovers. They are accompanied by appropriate details such as the tax amount and the invoice number that is of essence in tax reporting and compliance of the businesses. Each of the transaction if there are chargebacks or disputes, credit card Level 2 data over the transaction provides essential details.

How Does Level 2 Data Work?

During credit card transaction, payment gateway or processor gather all relevant information, maybe Level 2 inclusive. This information is then forwarded to the acquirer and issuer and they check the authenticity of the transaction and pay. There is a stipulation that Level 2 data has to be captured at the time of payment and, therefore, payment systems have to be optimised by merchants.

How Can I Enable Level 2 Data for My Business?

Before the details of Level 2 data can be implemented, the businesses have to make sure that the chosen payment processors or gateways can support this extra information. Such enhanced payment solutions today offer special fields enabling the merchants to enter and history numerous details of the transaction: invoice numbers and tax amounts included. This level of data should be worked with payment processors as they provide such kind of data.

Conclusion

Credit card Level 2 data improves credit card segmentation by adding a second level that is advantageous to both merchants and card holders. It leads to enhanced accuracy in transaction reporting, reduces fraud, and also simplifies the conditions for processing disagreements. In this case, Level 2 data can also assist businesses in achieving cost savings related to processing fees and improve the analysis of financial plans.