Visa launched the Commercial Enhanced Data Program (CEDP) in October, 2025 to promote enhanced data integrity for Product 3 (Level 3) transactions. Since its launch, Visa has implemented off-cycle changes to the program including process and rate changes.

Rate Changes

Effective January 2026, Visa increased interchange rates for CEDP Small Business transactions:

Additionally, Visa will sunset Product 2 (Level 2) transactions effective April 17, 2026. Product 2 (Level 2) transactions will not be declined - Visa will instead downgrade these transactions to Level 1 rates after the effective date. Product types effected are listed below:

To receive preferred rates after April, Visa recommends providing the additional data required for Product 3 (Level 3) transactions. Instead of only providing the tax rate, merchants will need to provide additional data fields. For more information on the data fields and the parameters required for Product 3 (Level 3) transactions, refer to Level 2 and Level 3 Data.

Process Changes

Review recent updates to merchant verification, lagged interchange timelines, and data quality enforcement.

Merchant Verification

In November, 2025 Visa announced a pause in merchant verification for CEDP. Merchant verification enables merchants to immediately receive preferred Product 3 rates and avoid the lagged interchange process to verify data quality before receiving preferred rates.

As of February 24, 2026 will resume the merchant verification process. To be considered, merchants should continue to send transactions as usual; Visa will assign verification status after merchant consistently meets enhanced data quality requirements.

Note: Visa will not consider historical transaction data from the verification pause period (November 20, 2025 to February 24, 2026) for verification. However, during this period lagged interchange was still in effect, and transactions that met data quality standards still received Level 2 and Level 3 rates.

Simultaneously, Visa is introducing a merchant exclusion process to remove merchants from CEDP eligibility due to a consistent lack of data quality. Merchants will be issued a letter of non-compliance to their acquiring bank. As with the verification process, exclusion is identified at the processor level (unique ISO / MID) combination; therefore, it would be possible for a merchant to become ineligible for CEDP with another processor, but still participate in CEDP through TabaPay.

When a merchant becomes ineligible for CEDP, any CEDP transactions sent to Visa (Level 2 or Level 3) will be downgraded to Level 1 rates automatically – the 5 bip transaction fee will still apply. To differentiate downgrades due to lagged interchange as opposed to removal from the CEDP program, we suggest reaching out to your acquiring bank to request immediate notification of non-compliance letters.

However, Visa provides monthly reports to flag transaction data quality issues which should support TabaPay clients in correcting their data before the exclusion process is triggered; TabaPay will continue to review these reports and alert clients if corrections are needed. TabaPay clients should also internally review transaction data regularly to monitor for data quality.

To be admitted back into the CEDP program, merchants will need to demonstrate corrective measures have been taken, and data quality is consistently meeting standards, before Visa will consider re-instating CEDP eligibility.

Lagged Interchange

Since CEDP launched in October, Visa has made adjustments to the duration of the lagged interchange process. This process assigns an initial rate of Level 1 to Level 3 transactions for merchants that are not verified. Once Visa reviews the transaction and confirms it meets data quality standards, Visa will adjust the transaction to Level 3 discounted rates.

As of March 4, 2026, Visa will reduce the estimated time for the lagged interchange process from 10-15 days to 7-12 days. In preparation for this shift, clients may see adjustments starting on March 3, 2026.

To support this reduced timeline, Visa has enhanced their machine-learning capabilities. Please note that due to the nature of machine-learning, clients should be aware that transaction data quality assessments may require increased precision over time.

For questions or concerns regarding CEDP, please contact us at [email protected].