The Visa CEDP program is Visa's replacement for the legacy Level 2 and Level 3 interchange qualification system. It launched April 12, 2025, and fundamentally changed how businesses qualify for reduced rates on commercial card transactions.
Key Takeaways:
- CEDP replaced Level 2/3 with verification-based qualification (AI audits your data)
- Three merchant statuses: Verified (best rates), Non-Verified (standard rates), Non-Participating
- Timeline: April 2025 launch → October 2025 enforcement → January 2026 rate changes → Level 2 retired (earlier than announced)
- 90% data quality over 30 days required for Verified status
- Fake data that worked before now fails; processors still selling it are putting clients at risk
Understanding this program is not optional for finance leaders processing B2B, government, or commercial card volume. The rules are different, the enforcement is stricter, and the financial stakes are higher than the old system.
What CEDP Replaced
Before CEDP, merchants could qualify for Level 2 and Level 3 interchange rates by submitting enhanced transaction data. The system worked on trust: submit the required fields, get the discount.
The problem was widespread abuse. Merchants and processors discovered that placeholder data triggered the same rate discounts as legitimate data. Fields got populated with zeros, generic descriptions, or repeated values. The discount applied regardless.
According to industry estimates, a significant percentage of transactions claiming Level 2 or Level 3 qualification contained fabricated or incomplete data. Issuing banks noticed the revenue loss. They pressured Visa to close the loophole.
CEDP is the response. The program shifted from trust-based qualification to verification-based qualification. Visa now audits transaction data using AI-powered validation. Fake data fails. Verified data earns the discount.
How the Program Works
CEDP uses a three-tier merchant classification system. Your status determines your rates and your access to interchange discounts.
Merchant Status Categories
Verified
- Consistently submits compliant data (90%+ quality over 30 days)
- Immediate access to Product 3 rates
- No lagged adjustments or settlement delays
- Status reviewed monthly
Non-Verified
- Data quality below threshold or new to program
- Transactions assessed at standard rates initially
- Subject to lagged review (10-15 day delay)
- If data passes audit, receives rate adjustment via TC20 settlement
- Working toward Verified status
Non-Participating
- Opted out of CEDP or excluded by MCC
- No access to Product 3 rates
- No participation fee charged
- Standard commercial interchange applies
The path from Non-Participating to Verified requires consistent data quality. There are no shortcuts. Switching acquirers resets your status to Non-Verified until Visa reassesses your data.
Program Timeline
CEDP rolled out in three major phases:
Phase 1: April 12, 2025
- Participation fee (0.05%) began on all CEDP-qualifying volume
- Level 2 transactions automatically included (no special flag required)
- Acquirer reporting started with monthly data quality assessments
- Merchant classification began based on historical data quality
This phase caught many merchants off guard. The participation fee applied immediately, even to businesses unaware their transactions qualified.
Phase 2: October 17, 2025
- Product 3 interchange rates took effect, replacing legacy Level 3 categories
- Verification status began determining rate access
- Lagged interchange adjustments (TC20 process) introduced for Non-Verified merchants
- AI validation fully activated
October 2025 marked the point of no return. Merchants relying on placeholder data saw immediate rate increases as their transactions failed validation.
Phase 3: January 24, 2026
- Small Business Card rate increase (+65 basis points for Product 3, +75 for Level 2)
- Level 2 penalty pricing for Small Business cards (now more expensive than no data)
- Corporate/Purchasing rates held stable
This phase widened the compliance gap. Merchants still on Level 2 now pay more than those submitting no enhanced data.
Phase 4: Level 2 Retirement (Earlier Than Expected)
Update (March 2026): Visa retired Level 2 fee programs ahead of schedule, earlier than the announced April 17, 2026 date.
- Level 2 fee programs have been retired (except Fleet fuel-only)
- Data requirements remain but without dedicated rate category
- Product 3 is now the only enhanced data program
The choice has simplified earlier than expected: full Product 3 compliance or standard commercial rates. No middle ground.
Why Visa Built This Program
The official explanation centers on fraud reduction and data integrity. Enhanced transaction data helps issuers verify legitimate business purchases, reducing dispute rates and chargebacks.
The financial reality is more direct. Visa and issuing banks lost significant interchange revenue to merchants gaming the legacy system. CEDP recaptures that revenue while providing a legitimate path to discounts for compliant merchants.
The 0.05% participation fee alone generates substantial revenue across billions in commercial transaction volume. Add the rate premium on non-compliant transactions, and the program becomes highly profitable for Visa.
This doesn't make CEDP unfair. The rates for Verified merchants are genuinely lower than standard commercial interchange. Businesses that invest in compliance benefit. But the program is designed to profit from those who don't.
The Fake Data Evolution
When Visa announced CEDP, we thought the era of using fabricated data to get lower processing rates was over. The whole point of this program update was to stop businesses from plugging in dummy numbers to qualify for discounts.
We underestimated the creativity of the market.
Some processors and gateways now offer "randomized" data solutions. Instead of static placeholder values, these systems generate dynamic fake numbers that look real enough to pass current validation. The sales pitch promises continued low rates without the compliance investment.
This is a more sophisticated version of the same old trick. They're playing cat and mouse with Visa's compliance team and AI-assisted audits.
We firmly believe the only sustainable approach is authentic data. Machine-generated values will eventually be flagged by machine-driven audits. The pattern recognition improves every cycle. When it catches up (and it will), program abuse penalties apply.
The merchants who relied on placeholder data five years ago learned this lesson the hard way. Don't repeat their mistake with the 2025 version of fake data.
The Compliance Roadmap
Getting to Verified status requires systematic effort. Here's the path:
Step 1: Audit Current State
Before changing anything, understand your baseline.
- Request your acquirer's monthly CEDP data quality report
- Identify which fields pass and which fail
- Calculate your current compliance percentage
- Document your commercial card transaction mix
Most merchants discover they're below the 90% threshold. Common failures include Purchase Identifier, Item Commodity Code, and formatting errors.
Step 2: Map Data Sources
The data Visa requires exists in your business systems. Finding it is the challenge.
| Required Data | Typical Source | Integration Need |
|---|---|---|
| Purchase Identifier | Sales order/PO | ERP export |
| Sales Tax | Invoice | Accounting system |
| Destination Postal | Ship-to address | Order management |
| Line Item Detail | Product catalog | ERP/inventory |
| Commodity Codes | Product master | Mapping table |
Your ERP holds most of this. The question is whether your payment gateway accepts it in Visa's required format.
Step 3: Implement Integration
Integration options depend on your technical stack:
Direct ERP-to-Gateway
- Custom development required
- Most control over data formatting
- Higher upfront cost ($25,000-75,000)
- Lowest ongoing maintenance
Middleware Solution
- Third-party service transforms data
- Faster implementation
- Ongoing subscription cost
- Dependent on vendor support
Gateway Enhancement
- Some gateways offer built-in CEDP support
- May require gateway migration
- Variable capability by provider
The integration approach that works for you depends on your current systems and internal development capacity.
Step 4: Test and Validate
Don't assume compliance. Prove it.
- Submit test transactions with known good data
- Monitor acquirer reports for 30+ days
- Track field-level pass rates
- Address failures before scaling
Step 5: Achieve and Maintain Verified Status
Once you hit 90% compliance consistently:
- Verification happens automatically
- Product 3 rates apply immediately
- Monitor monthly to maintain status
- Plan for ongoing data quality management
Status loss happens. Staff changes, system updates, and process drift all introduce risk. Build monitoring into your operations.
Industries Most Affected
CEDP impacts any business accepting commercial cards. Some feel it more than others.
High Impact:
- Manufacturing (high B2B percentage)
- Wholesale distribution
- Professional services with business clients
- Government suppliers
- Fuel and fleet operators
Moderate Impact:
- Retail with commercial card acceptance
- Healthcare (except MCC exclusions)
- Construction and trades
Excluded/Limited Impact:
- Travel industry (MCC exclusions)
- Restaurants (MCC 5812, 5814)
- Consumer-focused retail
If your business falls in the high-impact category and you haven't addressed CEDP, you're leaving money on the table every month.
What Verisave Does
We help finance teams achieve CEDP compliance without consuming internal bandwidth.
Our process:
- Compliance audit - We assess your current data quality and identify gaps
- Cost-benefit analysis - We calculate your exposure and potential savings
- Implementation support - We work with your team, processor, and vendors to execute
- Ongoing monitoring - We track your status and catch problems early
You don't pay unless we deliver measurable savings. The engagement is risk-free.
Frequently Asked Questions
What does CEDP stand for? CEDP stands for Commercial Enhanced Data Program. It's Visa's system for qualifying merchants for reduced interchange rates on B2B, government, and commercial card transactions. CEDP replaced the legacy Level 2 and Level 3 programs in April 2025.
When did CEDP enforcement start? CEDP launched April 12, 2025 with the 0.05% participation fee. Full enforcement with AI-powered validation and Product 3 rates began October 17, 2025. Major rate increases hit January 24, 2026. Level 2 programs were retired earlier than the announced April 17, 2026 date.
How do I get CEDP Verified status? Submit compliant data on 90%+ of your CEDP transactions for 30 consecutive days. Visa reviews monthly. Once verified, you get immediate access to Product 3 rates. Dropping below 90% triggers status loss and rate increases.
Which businesses are excluded from CEDP? Travel industry MCCs (airlines, hotels, car rentals), restaurants (MCC 5812, 5814), and certain healthcare MCCs for government corporate cards are excluded from Product 3. Fleet single fuel-only transactions are also excluded. These merchants should not submit enhanced data.
