Level 2/Level 3 processing
docsCurrentAdvancedLast updated: March 25th 2024, @ 2:39:30 pm
Level 2 and Level 3 card data processing is currently supported in the US.
What are Level 2 and 3 card payment transactions?
Card payment processing has 3 levels: Level 1, Level 2, and Level 3. The levels differ in the amount of information required to complete the payment as a Level 1, Level 2, or Level 3 eligible transaction. Level 1 requires less information and therefore generally incurs higher interchange fees compared to transactions processed with Level 2 and Level 3 data. Most businesses can operate at Level 1, however, when processing corporate and purchase credit cards, IC++ merchants can benefit from reduced interchange fees by providing additional transaction information called Level 2 and Level 3 data.
Which types of card payments qualify?
Corporate and purchase credit cards are eligible for Levels 2 and 3 processing if the required information is provided. Consumer cards are only eligible for Level 1 processing.
Level 2 and Level 3 cost optimization benefits do not apply to debit cards.
Which card networks support Level 2 and 3 processing?
Visa and Mastercard offer Levels 2 and 3 processing. American Express offers Level 2, and Discover offers only Level 1 processing.
How does a payment qualify?
To qualify for Levels 2 and 3 processing, merchants must send the following information. However, the card network and cardholder issuing bank ultimately make the determination of whether a transaction qualifies for Level 2 or Level 3 processing:
Level 2 data
- Card number, expiration, billing address, shipping address, and invoice number.
- Customer Code or PO number: a unique reference ID for the order.
- Tax amount: an amount must be submitted separately from the total transaction amount.
Level 3 data
- Level 2 data, and,
- Unit amount or unit price.
- Unit of measure.
- Freight or shipping amount: the total shipping and handling charges.
- Duty amount: the total charges for any import or export duties.
- Discount amount.
- Item commodity code.
- Item description.
- Item product code.
- Item quantity.
- Unit tax amount.
- Unit discount amount.
- Ship-from ZIP code.
Note: The partner, merchant, or other initiating party needs to provide the Level 2 and 3 payment details when using the Orders v2 API to start a payment.
Create Order request
This code sample shows Level 2 and 3 data in the body of a POST call to the Create order endpoint of the Orders v2 API. This request creates a new order and completes the payment in a single step by declaring the intent as CAPTURE:
curl -v -X POST https://api-m.sandbox.paypal.com/v2/checkout/orders \
-H 'Content-Type: application/json' \
-H 'PayPal-Request-Id: REQUEST-ID' \
-H 'Authorization: Bearer ACCESS-TOKEN' \
-d '{
"intent": "CAPTURE",
"payer": {
"name": {
"given_name": "Firstname",
"surname": "Lastname"
},
"address": {
"address_line_1": "123 Main St.",
"admin_area_2": "Anytown",
"admin_area_1": "CA",
"postal_code": "12345",
"country_code": "US"
}
},
"purchase_units": [
{
"reference_id": "Reference_ID_L2L32",
"description": "Description of PU",
"custom_id": "Custom-ID",
"soft_descriptor": "Purchase Descriptor",
"invoice_id": "INV_202302011234",
"supplementary_data": {
"card": {
"level_2": {
"invoice_id": "INV_202302011234",
"tax_total": {
"currency_code": "USD",
"value": "5.20"
}
},
"level_3": {
"shipping_amount": {
"currency_code": "USD",
"value": "1.17"
},
"duty_amount": {
"currency_code": "USD",
"value": "1.16"
},
"discount_amount": {
"currency_code": "USD",
"value": "1.15"
},
"shipping_address": {
"address_line_1": "123 Main St.",
"admin_area_2": "Anytown",
"admin_area_1": "CA",
"postal_code": "12345",
"country_code": "US"
},
"ships_from_postal_code": "12345",
"line_items": [
{
"name": "Item1",
"description": "Description of Item1",
"upc": {
"type": "UPC-A",
"code": "001004697"
},
"unit_amount": {
"currency_code": "USD",
"value": "9.50"
},
"tax": {
"currency_code": "USD",
"value": "5.12"
},
"discount_amount": {
"currency_code": "USD",
"value": "1.11"
},
"total_amount": {
"currency_code": "USD",
"value": "95.10"
},
"unit_of_measure": "POUND_GB_US",
"quantity": "10",
"commodity_code": "98756"
}
]
}
}
},
"amount": {
"currency_code": "USD",
"value": "100.30",
"breakdown": {
"item_total": {
"currency_code": "USD",
"value": "90.20"
},
"tax_total": {
"currency_code": "USD",
"value": "10.10"
},
"shipping": {
"currency_code": "USD",
"value": "10.00"
},
"discount": {
"currency_code": "USD",
"value": "10.00"
}
}
},
"items": [
{
"name": "Item1",
"description": "Description of Item1",
"sku": "SKU - 0",
"url": "http: //example.com",
"unit_amount": {
"currency_code": "USD",
"value": "45.10"
},
"tax": {
"currency_code": "USD",
"value": "5.05"
},
"quantity": "2",
"category": "PHYSICAL_GOODS"
}
],
"shipping": {
"address": {
"address_line_1": "123 Main St.",
"admin_area_2": "Anytown",
"admin_area_1": "CA",
"postal_code": "12345",
"country_code": "US"
}
}
}
]
}'
- Lines 25-31 declare a
level_2object insidepurchase_units.supplementary_data.card, including the invoice ID and the taxes charged for the payment. - Lines 32-82 declare a
level_3object insidepurchase_units.supplementary_data.card. Data includes shipping, duty, and discount amounts, as well as line-item information and units of measure.
See also
See the Level 2 and Level 3 Processing FAQ.