What is a level 3 merchant?

Level 3 Merchant: Compliance Requirements for High-Volume E-Commerce Businesses

In the e-commerce landscape, merchants are classified into different levels based on their transaction volume and risk profile. Level 3 merchants represent a specific category of high-volume businesses that handle a substantial number of online transactions annually.

What is a Level 3 Merchant?

A level 3 merchant is an e-commerce business that processes between 20,000 and 1,000,000 combined Mastercard and Maestro transactions per year. This high transaction volume typically indicates a significant presence in the online marketplace.

Compliance with Mastercard Secure Code (MSC)

Level 3 merchants are required to demonstrate compliance with Mastercard’s Secure Code (MSC) Program. MSC is a security protocol that enhances online transaction security by requiring cardholders to enter a unique password or code during the checkout process. This additional layer of authentication helps prevent unauthorized transactions and reduces the risk of fraud.

Specific Compliance Requirements

To maintain their Level 3 merchant status, businesses must meet the following specific compliance requirements:

• Implement MSC on their website
• Maintain a low chargeback ratio
• Adhere to all applicable industry regulations
• Provide accurate and complete transaction data to Mastercard

Benefits of Compliance

Compliance with Mastercard’s SDP Program provides several benefits to Level 3 merchants:

• Reduced risk of fraud: MSC helps minimize unauthorized transactions, protecting businesses and customers.
• Enhanced customer confidence: Customers are more likely to feel secure and comfortable making purchases from merchants that prioritize security.
• Improved reputation: Compliant merchants demonstrate their commitment to industry best practices and ethical business practices.

Conclusion

Level 3 merchants play a significant role in the e-commerce ecosystem. By complying with Mastercard’s SDP Program, these businesses demonstrate their commitment to security and integrity. Maintaining compliance provides multiple benefits, including reduced fraud risk, enhanced customer confidence, and an improved reputation within the industry.