Financial Transaction Services (FTS) wrote an article recently about why suppliers should be concerned about Level III credit card data when they are selling to the government and how they can save on transaction processing fees by providing it. You can read the article here, but I think the important question here is why does the government want the Level III data?
Here are four reasons why the government wants this data.
- Without Level III data, no one really knows what is being purchased. Level III data provides the line item details of a transaction. Not just the name of the vendor and the amount spent, but a list of the items that were purchased and the price that was paid for each item. This gives the government valuable pricing data and an insight into the needs of the government customer.
- The Level III data can be useful to key agency personnel to help streamline accounting and business practices and to merge payment data with electronic procurement systems.
- Level III data can then be used to facilitate strategic sourcing and to negotiate better prices in agency wide contracts. This can save the government millions of dollars.
- Knowing what is purchased under every transaction also helps the government protect itself against fraudulent purchases. There is always a temptation to misuse a government credit card and the government managers must be vigilant against abuse. Having Level III data helps them make sure only proper items are purchased and that they are compliant with agency guidelines.
It is important for suppliers to understand why the government asks them to provide Level III financial data. Besides, if providing the data also saves the supplier money in transaction processing fees, everyone comes out a winner.