Starting April 18, 2025, small businesses that accept Visa commercial cards lost access to a pricing tier that had saved them money on business-to-business transactions for years. Visa’s Level 2 interchange program, which rewarded merchants for submitting enhanced transaction data like sales tax amounts and customer codes, was retired on that date. Payment processors had warned clients that the shift could add roughly 75 basis points to the cost of each qualifying transaction, according to advisory notices reviewed by multiple industry sources and discussed in merchant trade forums. Now, more than a year later, merchants and processors say those projections have largely held up.
For a company processing $50,000 a month in commercial card volume, that increase translates to approximately $375 in additional monthly fees with no change in service. The impact has been especially painful for independent retailers, wholesalers, and B2B service providers already operating on thin margins. Consider a mid-sized plumbing supply distributor that processes $120,000 per month in corporate purchasing card payments: at 75 basis points, the annual cost increase comes to roughly $10,800, a sum that can erase a meaningful share of net profit for a business running single-digit margins.
What Level 2 data actually is and why it mattered
Visa’s interchange system charges merchants a percentage of each card transaction, and the rate varies depending on how much information the merchant transmits with the sale. Standard consumer transactions send basic data: the amount, the date, and the merchant name. Level 2 transactions went further, including the sales tax amount, the customer’s accounting or purchase-order code, and the merchant’s postal code.
Card networks historically offered lower interchange rates for Level 2 submissions because the additional data reduces fraud risk and simplifies reconciliation for card-issuing banks. Government agencies and large corporations often require their purchasing cards to be processed at Level 2 or Level 3 (which adds full line-item detail) precisely because the richer data trail supports auditing and expense management.
With the program gone, merchants who invested in point-of-sale systems and gateway configurations capable of passing Level 2 fields no longer receive a rate benefit for doing so. Their commercial card transactions now default to standard commercial interchange tiers, which carry higher costs.
Where the 75 basis point figure comes from
The 75 basis point estimate circulated through processor advisories and merchant advocacy channels starting in early 2025. It represents the approximate spread between the Level 2 qualified rate and the standard commercial card interchange rate for common merchant category codes. Visa never published a public bulletin confirming the exact figure, and the company did not respond to requests for comment at the time of the program change or in the months that followed.
Because interchange rates vary by card type, transaction size, and merchant category, the actual increase for any individual business can be higher or lower than 75 basis points. Merchants processing large-ticket B2B sales on corporate purchasing cards have reported the sharpest impact, while those with smaller average tickets or a mix of consumer and commercial volume have seen a more modest change on their blended effective rate.
As of spring 2026, no federal agency, independent research organization, or academic institution has published a study quantifying the aggregate cost shift merchants have absorbed since the program ended. The estimates that shaped the industry’s expectations were based on processor-level modeling, not audited data from Visa’s internal rate tables. The 75 basis point number should therefore be treated as the best available approximation rather than a verified fact.
The legal backdrop: years of swipe-fee battles
The Level 2 retirement arrived against a backdrop of prolonged conflict between merchants and the two dominant U.S. card networks over interchange pricing. Visa and Mastercard reached a settlement in a landmark antitrust case brought by merchants who alleged the networks colluded to fix swipe fees and block retailers from steering customers to cheaper payment methods. The settlement, which received final court approval in late 2024 after an earlier version was rejected, included provisions to temporarily reduce certain interchange rates and give merchants more flexibility to surcharge by card brand.
Small-business groups were among the most vocal participants in that litigation, arguing that interchange fees consume a disproportionate share of revenue for independent shops and restaurants compared with large national chains that can negotiate volume discounts with processors.
The Federal Reserve separately tracks debit card interchange under Regulation II, which caps fees for large issuers and requires public reporting of average rates. But Regulation II applies only to debit transactions. It does not govern commercial credit card interchange, meaning there is no federal cap or mandated transparency requirement constraining the replacement rate Visa sets for transactions that previously qualified at Level 2.
That regulatory gap sits at the center of merchant frustration. In the debit market, the Fed provides a published benchmark. In the commercial credit card space, networks set rates with far less external oversight, and merchants have limited visibility into how those rates are determined.
What Visa still has not explained
More than a year after the program ended, Visa has not issued a public statement explaining why it chose to retire Level 2 pricing. Two theories have circulated widely among processors and trade groups. The first is operational simplification: reducing the number of interchange tiers makes the rate structure easier for processors and merchants to navigate. The second is revenue optimization: eliminating a discount tier on commercial cards increases per-transaction revenue at a time when rising transaction volumes make the change less visible in percentage terms.
Neither explanation has been confirmed on the record by Visa executives. The company’s silence has left merchants and processors to interpret the change through their own experience, and most read it as a straightforward cost increase with no offsetting benefit.
It also remains unclear whether the antitrust settlement’s terms influenced the decision. The settlement addressed certain fee caps and transparency commitments, but no court filing or settlement document reviewed for this article establishes a direct link between those provisions and the Level 2 program’s elimination. Merchants who expected the settlement to reduce their overall processing costs have found that savings negotiated in one category can be offset by increases in another.
Mastercard’s parallel program and what it means for dual-network merchants
Mastercard operates its own tiered interchange structure for commercial cards, including enhanced data rates that function similarly to Visa’s now-retired Level 2 tier. As of May 2026, Mastercard has not announced a parallel elimination of its Level 2 pricing. That distinction matters for merchants who process commercial volume across both networks. A business that routes a significant share of B2B transactions through Mastercard commercial cards may still be capturing the lower enhanced-data rate on that portion of its volume, partially cushioning the blow from Visa’s change.
However, merchants should not assume Mastercard’s program will remain in place indefinitely. Network rate structures tend to converge over time, and processors have noted that Mastercard periodically revises its own commercial interchange tiers. Merchants who process across both networks should verify with their processor at least quarterly whether Mastercard’s enhanced-data rates still apply to their transactions, since any change there would compound the cost impact of Visa’s move.
What merchants can still do
For small-business owners who have already felt the sting of higher rates, the most productive step is to contact their payment processor or merchant services provider and request a written breakdown of how their interchange costs have shifted since April 2025. Processors can model the impact based on a merchant’s specific transaction mix and identify where the biggest increases landed.
Merchants should also review their processing agreements for renegotiation clauses triggered by material changes in network pricing. Businesses with significant B2B volume may have leverage to negotiate lower processor markups or explore competing offers from other acquirers.
Other options worth evaluating:
- Surcharging: In states where it is legal, merchants can pass card-brand-specific surcharges to customers, though this requires clear disclosure and compliance with both state law and network rules.
- Payment steering: Encouraging commercial customers to pay by ACH, wire transfer, or check can eliminate interchange costs entirely on those transactions, though it adds reconciliation complexity.
- Level 3 processing: Merchants who can submit full line-item detail (Level 3 data) should confirm with their processor whether Visa’s Level 3 rates remain available. If so, upgrading data quality could partially offset the loss of Level 2 pricing.
Why the interchange information gap keeps widening for small merchants
The gap between what merchants know and what Visa has formally disclosed is itself part of a recurring pattern. The payments industry has a long history of announcing rate changes through processor channels rather than direct public communication, leaving smaller merchants at an informational disadvantage compared with large enterprises that employ dedicated payments teams.
A year into the post-Level 2 reality, the 75 basis point figure remains the best available estimate rather than a confirmed, audited number. Visa has published no updated commercial card rate schedule that would let merchants verify the increase independently, and no regulatory body has stepped in to fill the void. For small businesses already stretched thin, the lesson is familiar and unwelcome: in the interchange economy, the costs are concrete, but the explanations rarely are.
