Payment processing costs climb year after year, and there’s nothing merchants can do aside from watch.
Interchange rates and card network rules changes as often as any other Terms of Service. But in this case, business owners cough up more money for unchanged features.
In April 2025, Visa launched the Commercial Enhanced Data Program, known as CEDP. This initiative rewards businesses that submit detailed transaction data with automatic rate reductions. However, it also penalizes those who don’t comply with a 40% fee increase.
The verification deadline is October 17, 2025, making compliance more important than ever.
If you can tap into the perks of CEDP, you can unlock substantial savings. Here’s how to do it.
IMPROVE YOUR PAYMENT TECH STACK
CEDP and Transaction Data Levels
Visa designed CEDP to encourage merchants to submit comprehensive transaction information, particularly for business and commercial credit card transactions. The program focuses on what the industry calls Level 3 data submission, which goes beyond basic payment information.
Payment processors categorize transaction data into three distinct levels, each requiring different amounts of detail:
- Level 1 data includes only the basics that appear in every credit and debit card transaction. This includes card number, transaction amount, currency code, merchant name, and transaction date. Most everyday consumer purchases at a point-of-sale POS system fall into this category and carry the highest interchange fees.
- Level 2 data builds on this foundation by adding fields like sales tax amounts, merchant postal codes, and customer purchase order numbers. This level typically applies to transactions involving corporate cards and business accounts. Companies use this additional payment information to track expenses more accurately and reconcile employee spending in real time.
- Level 3 data is the most detailed tier, capturing line-item specifics. This includes product descriptions, quantities, commodity codes, shipping information, and discount details. For example, if an employee uses a corporate card for business travel, Level 3 data shows exactly what hotel room they booked, what rental car they chose, and what meals they purchased. Level 3 makes expense reports far easier for accounting departments to verify.
How CEDP Benefits Your Bottom Line
CEDP offers real financial advantages for merchants who embrace detailed data submission.
Visa reduces interchange rates by approximately 7% to 10% for qualifying transactions, translating directly into lower payment processing costs. A merchant processing $5 million annually in commercial card transactions could save tens of thousands of dollars each year through this program.
Beyond direct cost savings, CEDP creates a level playing field across the card network. Visa sets these fees at the network level and makes them non-negotiable. This rigidity gives all merchants equal access to savings regardless of their company size. Small businesses compete on the same terms as large corporations when it comes to qualifying for reduced interchange rates.
The program also drives merchants to improve their operational processes. Businesses that implement CEDP compliance often discover they need to clean up their data practices. A solid clean-up results in more accurate reporting across all payment methods.
While CEDP doesn’t directly increase credit card approval rates for customers, it does strengthen the overall transaction process by providing issuing banks with more detailed information about each purchase. This transparency helps reduce chargebacks and improves trust between merchants, customers, and card networks.
The High Cost of Non-Compliance
Merchants who fail to submit proper Level 3 data face severe financial consequences under CEDP. Starting October 17, 2025, Visa will start validating the data merchants provide, and those with errors, inconsistencies, or incomplete submissions will face a 40% increase in transaction fees.
The validation process doesn’t tolerate shortcuts. Even small errors like mismatched tax data or incorrect product codes disqualify transactions from reduced rates.
Visa sends processors a monthly list of verified merchants. Businesses not appearing on this list cannot access CEDP rates until they achieve verification. However, merchants don’t lose their verified status over occasional data errors. Visa allows for a small percentage of mistakes without affecting verification, though the company hasn’t published specific thresholds.
When a verified merchant sends bad data, Visa notifies the processor and gives the merchant a chance to correct errors before changing their status to non-verified.
Many business owners are still unfamiliar with CEDP requirements or misunderstand how the program works. High levels of risk come with this knowledge gap. Integration costs are yet another hurdle. Smaller merchants need to invest in updated systems or consult with payment processing services to enable accurate Level 3 data submission.
ENABLE LEVEL 3 DATA FOR YOUR BUSINESS
Implementing CEDP Compliance Strategies
Implementation starts with a thorough audit of recent commercial card transactions to determine how often the business currently submits Level 3 data and whether it’s already receiving rate reductions.
The next step is validating that payment systems can capture and transmit all required Level 3 data fields. This means examining the payment gateway and POS software to confirm they reliably handle detailed transaction information.
Many businesses discover they need to upgrade their technology infrastructure to support mobile payments and online payments with complete Level 3 data submission.
Merchants have to address data quality issues head-on by identifying and fixing common errors like missing tax details, incorrect product codes, or inconsistent shipping information. These problems often stem from disconnected systems that don’t communicate effectively during the transaction process.
Business owners should establish clear protocols for data entry and verification to maintain accuracy across all credit card payment processing activities.
Secure Payment Information Through Tokenization
As merchants collect more detailed transaction data for CEDP compliance, they also need to strengthen their security measures to protect sensitive payment information. Tokenization is as one of the most effective techniques for securing credit card details and preventing data breaches.
Tokenization replaces sensitive data elements like credit card numbers with unique identifiers called tokens. These tokens hold no intrinsic value and cannot be mathematically reversed to reveal the original payment information.
When a customer enters their card details during a purchase, the tokenization system immediately substitutes the actual numbers with a randomly generated token before storing any data.
The process works through several steps that protect both customers and businesses:
- First, the system identifies sensitive data including credit card numbers and bank account information that requires protection.
- Next, it generates unique tokens using various algorithms and encryption techniques designed to be non-reversible.
- The system then stores these tokens in a separate database called a token vault, implementing strict access controls and encryption to prevent unauthorized access.
A secure mapping table associates each token with its corresponding original data. Authorized users can retrieve payment information when necessary for processing legitimate transactions. Importantly, this mapping table itself contains no sensitive information.
Tokenization significantly reduces the risk of data breaches. Hackers who intercept tokenized data receive only meaningless strings of characters that provide no access to actual credit card numbers or bank accounts.
As CEDP pushes merchants to collect more detailed transaction data, tokenization ensures that this information stays secure throughout the entire payment processing work cycle.
Preparing for the Future of Payment Processing
The ideal time to act was months ago, but it’s not too late. Auditing current data practices, confirming system capabilities, and seeking expert guidance will help you qualify for CEDP benefits. Business owners who treat payment processing as a strategy rather than a background function will thrive as industry standards continue evolving.
The choice belongs to each merchant, but the consequences affect every transaction they process.
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