As Visa’s Commercial Enhanced Data Program (CEDP) rolls out as a replacement for legacy Level 2/Level 3 data programs, merchants will start seeing changes to their fee statements. The most significant is the new CEDP participation fee – which is intended to be offset by a larger interchange discount for qualifying transactions.
How the Participation Fee Works
Visa will apply a 0.05% participation fee to any transaction that submits enhanced Level 2/Level 3 data and is flagged as a CEPD transaction. (If it includes the data but is not flagged as a CEDP transaction, the fee will not apply.)
The CEDP participation fee applies regardless of whether the transaction qualifies for the interchange discount. It is a separate cost than the traditional interchange fee.
How CEDP Discounts Offset the Participation Fee
Transactions that meet CEDP standards can qualify for a discount of 10 to 15 basis points.
Here’s how the math shapes up for a $1,000 transaction:
- 10 basis points = $1.00
- 15 basis points = $1.50
- 05% participation fee = $0.50
Even on the lower end of the discount range, merchants can net a savings of between $0.50 and $1.00. Over time, these savings can add up considerably for merchants that do a high volume of B2B sales.
Estimate Your Real-World Savings
Understanding how these numbers play out in practice depends on your data quality and transaction mix. Curbstone can help review your fee statement line by line, identify where you qualify for CEDP discounts, and flag where participation fees may not be offset.
For a comprehensive, no-cost review of your most recent fee statement, contact us today.
