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Insights and Expertise
Visa tightens rules Visa is overhauling its Commercial Enhanced Data Pro-
gram (CEDP) by inserting a non-interchange pass-through
for commercial data fee (NIPTF) for participation and making it more difficult
to qualify for Level 2 and Level 3 interchange rates. In
April 2025, Visa launched a phased rollout of its new ver-
incentives sion of the CEDP, which introduces significant changes to
Level 2 and Level 3 programs.
By Ken Musante and Elaina Smith The goal is to improve the quality of data shared between
Napa Payments and Consulting, Secure Bancard merchants and issuers and eliminate filler data.
oth Visa and Mastercard have incentive inter- In the past, acquirers and merchants accepting corporate
change to encourage acquirers to provide and purchasing cards have benefitted from reduced inter-
additional details with their transactions. This change rates by providing Level 2 and Level 3 data, even if
B enhanced data, referred to as Level 2 or Level the data was not accurate or validated. This non-financial
3 data, was introduced back in the 1990s to allow the card information was then shared with cardholders, ostensibly
networks to better serve the B2B or commercial market to assist with reconciliation, tax compliance, purchasing
and compete with American Express. controls and supplier management.
All transactions contain Level 1 data. Level 2 requirements Acquirers and merchants providing these data elements
are less onerous and Level 3 the most comprehensive. A could save over 1 percent on the transaction without any
table of the data Levels is provided in a sidebar to this ar- increase in costs—until now.
ticle.
As part of the first phase that became effective in April
2025, Visa introduced a new NIPTF, a 0.05 percent fee on
all transactions that include enhanced Level 2 and 3 data.
At the same time, Visa started sending reports to acquir-
ers whose merchant transactional data contained Level 2
and 3 information that will fail future validation. The goal
is to help them prepare to meet more stringent standards
that will be introduced in later phases of the rollout. Be-
cause acquirers frequently supply "filler data," as opposed
to precise facts and figures aligned with the data fields,
adhering to historical practice may result in a high failures
rate under the new standards.
In the second phase, effective October 2025, Visa will im-
plement a new CEDP interchange schedule but is strictly
enforcing the submitted data through its newly intro-
duced data integrity process. Non-compliant fields will
be flagged. If the submitted data fails, Visa will provide
the acquirers with the associated error codes and the mer-
chant will not earn the reduced interchange rate.
Visa’s newly implemented monitoring will employ ma-
chine learning technology to identify invalid fields. Previ-
ously, Visa was not scrutinizing and validating data. As
was widely known, much of the Level 2 and Level 3 data
was merely filler data and was neither accurate nor vali-
dated.
Going forward, tax exempt transactions, for example, must
be designated as such, and merchants cannot simply insert
a tax rate based on the buyer’s (or seller’s) ZIP code. Mer-
chants may not use generic line-item descriptions, such as
the merchant descriptor. Fields must not be left blank or
filled with a single character. Part of Visa’s new algorithm
involves a process of categorizing merchants as verified or
non-verified, which impacts their ability to participate in
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