The New Era of Commercial Payments: Navigating Visa's CEDP
The world of payments is in a constant state of evolution, and staying ahead of the curve is crucial for any business looking to optimize its bottom line. RPY has seen firsthand how small changes in interchange programs can have a massive impact on a company's financial health. Companies processing B2B transactions need to pay close attention to Visa's upcoming changes with the introduction of the Commercial Enhanced Data Program (CEDP).
For years, businesses have leveraged Level 2 and Level 3 interchange programs to reduce their processing costs by providing detailed sales and product information. But now, Visa is sunsetting these programs in favor of a new, more expansive framework. The current Level 3 program will be replaced by CEDP and its new Product 3 interchange rates in October 2025, and the Level 2 program will be fully retired in April 2026. This isn't just a simple rebranding; it's a fundamental shift in how commercial card transactions will be evaluated, requiring cleaner and more accurate data.
Understanding the Opportunity
The CEDP brings both challenges and significant opportunities. The most notable change is the potential for increased savings. Visa is introducing lower Product 3 interchange rates that will be more favorable than the current Level 3 rates. But perhaps the most exciting development is the expansion of eligibility. Previously, Business Credit cards only qualified for Level 2 rates, but under CEDP, they can now be eligible for the new, lower Product 3 rates. For businesses that rely heavily on Business Credit cards, this could unlock substantial savings on qualified transactions.
The Catch: Data Quality and Verification
With great opportunity comes a new level of responsibility. The CEDP places a strong emphasis on data quality. Visa is introducing a verification process where businesses are evaluated based on the quality of their submitted line-item data. To qualify for the best rates at the time of the transaction, you'll need to become a "verified" business. This process can take up to a couple of months, and Visa will continuously monitor your data to ensure it meets their quality thresholds.
This new verification model requires a proactive approach. While you can still qualify for Product 3 rates before verification, it will be through a less immediate, retroactive rebalancing process that can take up to two months. The message is clear: businesses that prioritize clean, accurate data will be the first to realize the benefits of CEDP.
What Your Business Should Do Now
The time to act is now. With the October 2025 deadline looming, businesses must prepare for this transition. Here are my key recommendations:
Audit Your Data: Assess your current systems and processes for collecting and submitting line-item data. Can you consistently provide the information required for Product 3 rates?
Engage with Your Partners: Work closely with your payment processor and other technology partners. Ensure they are prepared for the CEDP transition and can help you meet Visa’s new data quality standards.
Strategize Your Rollout: Don't wait to start submitting line-item data. The sooner you begin, the sooner you can start the verification process and lock in the best possible rates.
The shift to CEDP is more than just a regulatory change; it's an opportunity for businesses to optimize their payment processing strategy. By understanding the new rules and proactively ensuring your data is up to par, you can position your company to capture significant cost savings and maintain a competitive edge in a rapidly changing payments landscape. If you need assistance, please get in touch with RPY; we can help.
