The payments landscape is undergoing a significant transformation. If your business accepts commercial, corporate, or purchasing cards, you must pay close attention to Visa's shift away from its legacy Level 2 (L2) and Level 3 (L3) incentive programs. Starting in April 2026, the Level 2 interchange program will be officially retired, making way for the new Commercial Enhanced Data Program (CEDP). This change isn't just a fee adjustment—it’s a structural overhaul that mandates stricter data quality for you to continue qualifying for reduced interchange rates. Here's a breakdown of what's happening, key dates, and how to prepare for the transition that is well underway.
The Core Change: Level 2 is Being Replaced by Product 3
Historically, merchants could qualify for lower interchange rates on business-to-business (B2B) transactions by submitting enhanced data. This system had three tiers:
- Level 1: Basic transaction data (total amount, date, etc.).
- Level 2: Required L1 data + tax amount and a customer code/PO number.
- Level 3: Required L2 data + full line-item details (SKU, product description, quantity, etc.)—offering the lowest rates.
Visa's new Commercial Enhanced Data Program (CEDP) is consolidating these incentives under a new umbrella called Product 3. The key takeaway is simple: Level 2 interchange rates are being phased out.
Key Dates for the Transition
| Date | Event | Impact on Merchants |
|---|---|---|
| April 2025 | CEDP Program Launch & New Participation Fee | A 0.05% participation fee began on all eligible commercial card transactions. |
| October 2025 | Product 3/CEDP Incentive Program Launches | New Product 3 interchange rates replace the existing Level 3 program, with stricter data validation starting. |
| January 2026 | Interchange Rate Increases (Specific to Business Credit) | Visa is scheduled to implement specific rate increases for certain Product 3 and Level 2 Business Credit card categories. |
| April 2026 | Level 2 Interchange Program Sunsets | The vast majority of Level 2 interchange rates are discontinued. Product 3 becomes the sole path to reduced commercial interchange rates. |
The Biggest Risk: Loss of Interchange Discounts
If your business currently relies on Level 2 rates for commercial card transactions, the immediate danger is a downgrade to higher, non-qualified rates.
The new Product 3 program is not a simple rebranding of Level 3; it has stricter data requirements enforced by AI-assisted audits. In the past, some systems could use templated or placeholder data to qualify for L2/L3 discounts. Under CEDP, this will no longer be allowed.
- Higher Standard: To get the best Product 3 rates, your transaction data must be accurate, complete, and verifiable from your ERP or invoicing system.
- Verification: Visa is classifying merchants as Verified or Non-verified based on the quality of their submitted data. Only Verified merchants consistently qualify for the lowest rates.
If your systems are not updated to meet the new, rigorous standards for Product 3, you will lose the Level 2 discount you previously enjoyed and face a potentially significant increase in your total cost of acceptance.
Action Steps to Prepare for 2026
To protect your bottom line, you must take proactive steps to transition from Level 2 to Product 3 compliance.
1. Audit Your Data Flow
Perform a detailed audit of your current payment processing system to confirm what data fields you are sending. You need to be ready to provide the full line-item detail required by the Product 3 standard.
2. Update Your Software and Integrations
Work with your payment processor or gateway to ensure your software is capable of submitting the necessary invoice-quality data. This often requires integrating your enterprise resource planning (ERP) or invoicing system directly with your payment gateway to ensure data is accurate and not auto-filled.
3. Track Your Effective Rate
CEDP will introduce more volatility as transactions are audited. Track your effective interchange rate closely—especially on commercial transactions—to identify any increases immediately. A sudden drop in your "qualified" transaction rate suggests your data is failing the new Product 3 audits.
How Beacon Payments Can Help
The shift to CEDP and the retirement of Level 2 is complex and highly technical, requiring deep integration and a clear understanding of the card network's new verification standards.
Beacon Payments specializes in B2B payment solutions and is actively helping clients navigate this transition through Interchange Optimization services:
- CEDP Readiness Assessment: They can audit your current payment infrastructure to identify data gaps that would cause you to fail the new Product 3 verification and incur higher interchange costs.
- Automated Data Enrichment: Beacon's payment technology is designed to automatically capture, format, and enrich your transaction data with the necessary line-item detail and invoice references. This ensures that even complex B2B payments meet Visa's rigorous standards for the lowest available Product 3 interchange rates.
- Interchange-Plus Pricing Model: By operating on a transparent Interchange-Plus model, Beacon ensures that when your data does qualify for the lower Product 3 rates, you receive the full benefit of those savings—not just a blended, obscured rate.
Working with an expert partner is now essential to convert this mandatory compliance change into a competitive advantage.
The sunset of the Level 2 program is a clear message from Visa: data quality is the new key to B2B payment savings. By taking action now, and partnering with experts like Beacon Payments, you can ensure your business successfully navigates the transition to CEDP and continues to benefit from reduced interchange rates in 2026 and beyond.