I’ve spent many years helping commercial companies get the best possible rates on their financial processing charges. Over three years ago, I organized a small team to focus on bringing that benefit to the government contractor community.

It soon became apparent we had a big educational effort on our hands. Now I realize that there is always a fear of change in every market. But a good part of the resistance to Level-3 financial data in the government contractor community seems emotional and misinformed to me.

Here’s a specific example. This past November a prominent contractor published a story that was way off base related to upcoming Level-3 requirements. Entitled “Who Pays for the Government’s Data,” the piece leads off by trying to link Level-3 with other unrelated reporting mandates. It then tries to paint the list of required data fields as onerous, as if collecting them was a manual process.

Where does this fear of Level-3 come from? Beyond the natural reluctance to change, much of the misinformation about Level-3 comes from the contractor’s current service providers. That could be a firm providing ERP services, or maybe a local bank that the contractor affiliated with way back when the firm incorporated.

These firms criticize Level-3 because they simply don’t understand it and can’t provide it. In fact, it is estimated that over 90% of merchant service providers are not qualified to consult on Level-3 issues.

The facts are that complying with Level-3 mandates isn’t hard at all. Many times an internal IT person can make the change. Other times it requires a relatively simple change to your gateway or your card processor.

Plus the detractors never seem to acknowledge the benefits either. A contractor who collects and passes Level-3 financial data benefits in three main ways:

  • The contractor will be viewed as more qualified provider of service to the government customer;
  • The transactions will be more secure due to the greater amount of information, helping the government to ensure proper use of GSA SmartPay cards;
  • They will provide the most secure “card not present” transactions recognized by the processing market, thereby securing the most favorable rates for the government customer.


So the next time someone misunderstands the requirement to process Level-3 data, ask them to explain their negativity. Or, send them this post – I’d love to debate them on this topic!