A Merchant’s Guide to CEDP Compliance

A Conversation with InterPayments’ Solutions Architect and Front-End Product Lead Sean Marraffa

Surcharging is just one piece of the payments puzzle, and merchants need to stay aware of broader industry changes to get the most out of their programs. Understanding how different strategies work together is key to protecting the bottom line and maintaining a competitive advantage.

One major update on the horizon is Visa’s Commercial Enhanced Data Program (CEDP), which will significantly change how commercial card transactions are processed and how merchants pay for them. With the program set to take effect on October 17, we spoke with InterPayments’ Solutions Architect and Front-End Product Lead, Sean Marraffa, about where surcharging fits into the bigger payments picture, InterPayments’ role in driving compliance, and the steps merchants can take now to take full advantage of the program’s benefits.

Let’s start with getting to know you. Can you tell us about your background and how you came to lead Solutions Architecture and Front-end Product at InterPayments?

I’ve been immersed in technology from a young age, starting as a software developer at my family’s company when I was 15, building enterprise resource planning systems. This job taught me not just how to code, but also how businesses rely on technology to solve problems—something that’s guided me throughout my 25-year career.

I then moved into payments as a systems integration analyst at a payment gateway, certifying over 400 applications, from enterprise resource planning to point of sale to property management systems, and gaining a broad understanding of how payments flow across different platforms and what makes the user experience seamless.

Today at InterPayments, my role blends solutions architecture with product development, working directly with merchants and partners to implement compliant surcharging via our APIs, and feeding insights back into product development to fill gaps, enhance functionality, and ensure real-world needs are met. It’s this combination of software expertise, integration experience, and direct merchant collaboration that allows me to make fee recovery easier and faster while keeping compliance at the forefront.

Starting with the basics, can you explain Level 1 (L1), Level 2 (L2), and Level 3 (L3) data in simple terms?

Credit card transactions are categorized by how much data is submitted with the payment. Level 1 is just the payment amount. Level 2 adds things like tax information, and Level 3 goes further, including detailed line-item data—think of it like a receipt with products, quantities, and prices.

Describe Visa’s CEDP and why it matters for merchants.

For merchants, the amount and quality of transaction data directly impact the cost of processing payments. While the exact savings depend on the card type and issuer, more detailed data generally translates into lower interchange fees. Level 1 transactions carry the highest costs, Level 2 offers moderate discounts, and Level 3 can deliver significant savings.

Therefore, in an effort to qualify for larger savings, many systems submit Level 3 data that isn’t fully accurate—sometimes nothing more than a fabricated line item repeated across every transaction. Visa’s new Commercial Enhanced Data Program, or CEDP, addresses this issue by requiring merchants to provide complete and accurate Level 3 data. Submissions are verified, and merchants who comply are rewarded with savings that go beyond standard Level 3 rates. Visa calls this new savings level “Product 3.”

In my view, CEDP is Visa’s way of acknowledging that accurate Level 3 reporting takes extra effort. Their message is clear: if merchants put in the work to get it right, they’ll unlock deeper savings with Product 3 rates.

At what point should a merchant start to consider making changes to their processes around CEDP?

Merchants should start immediately. CEDP begins on October 17th, which is when the new rates go into effect. Visa is currently verifying merchants that are already sending the correct data. These merchants can contact their processor today to start the process.

If a merchant waits until October 17th to start providing the enhanced data, they may not receive the preferred rates immediately. While there is a review process that can backdate approvals, relying on it is risky.

If a merchant could only take one action today to prepare for these updates, what should it be?

I’d say start at the beginning and validate that you actually have the data you’ll need. Some merchants simply don’t track the line-item details required for Level 3, including tax, product description, product code, stock keeping unit (SKU), and unit price. If that data isn’t available in your enterprise resource planning (ERP) or point-of-sale (POS) source system, you won’t be able to submit it for verification. Merchants that do have this transaction-level data must submit it and have the fields validated by Visa’s CEDP to qualify for a lower interchange rate.

What are the potential costs or risks if a merchant does nothing to adapt to these changes?

Failing to qualify for CEDP discounts can quickly erode a merchant’s competitive edge. Without proactive preparation, merchants are likely to encounter unexpected billing adjustments and the scramble to implement fixes under pressure. Submitting cleaner data equals better interchange rates, which means inaccurate Level 3 data puts merchants at risk for missing out on valuable fee reductions that directly affect their bottom line.

With the CEDP transition ahead, how should merchants evaluate whether surcharging is the right strategy for their business to maximize savings on transaction fees?

Merchants should view surcharging as a complement to CEDP, not a replacement. While CEDP lowers interchange costs on qualifying commercial transactions with enriched transaction-level data, surcharging shifts fees—transparently—by giving customers a choice to pay with a no-fee method or accept the surcharge. Both can drive meaningful margin impact when implemented correctly.

Ultimately, merchants should define their goals for surcharging, whether that’s cost recovery, customer behavior incentives, or payment method preferences, and work with a Managed Surcharge Provider to design a program around that, while also participating in CEDP to lower costs and keep surcharges reasonable for customers.

What specific changes is InterPayments implementing behind the scenes to support merchants during this transition?

We’ve been making several updates behind the scenes to help merchants through this transition. On the core side of our surcharging engine, we’ve updated how we calculate rates and averages so everything aligns with Visa’s new program requirements. At the same time, we’ve made a lot of enhancements to PayLink, our virtual payments terminal, so merchants can enter product and service details directly into transactions.

For larger merchants with ERPs or other source systems that already house all that invoice and line-item data, we’ve built connectors that pull it automatically at the time of payment. That way, they don’t have to rekey everything just to qualify for Level 3. And for merchants who can’t support a connector, we’ve improved PayLink to recognize when a Visa commercial card transaction requires extra detail and prompt for only what’s necessary. It cuts down on manual work while still making sure the right data is captured. Even though these changes are focused on Visa’s program, we’ve structured them with flexibility in mind so that if any other credit card company tightens their standards in a similar way, we can support those networks just as easily.

Everything we build is designed to make fee recovery faster, easier, and compliant, and CEDP is no different. If we can make the process simple and reliable, merchants not only recover more but also improve customer sentiment. At the end of the day, there’s no reason not to take advantage of Level 3 rates if you qualify, and our job is to make sure merchants can do that without adding friction for them or their customers.

How do you approach solution design in a way that balances regulatory requirements, merchant needs, and seamless customer experience?

I always start with compliance, because that’s non-negotiable. From there, I put myself in the shoes of the merchant, considering what’s intuitive, fits their day-to-day processes, and creates a simple, transparent experience. When the best path isn’t immediately clear, I collaborate directly with the merchant, bringing compliance expertise while they bring insight into what works for their teams and customers.

From an operational perspective, how do you work with merchants’ and partners’ internal teams to ensure InterPayments’ solutions can be both technically sound and practical to adopt?

We don’t just build in a vacuum. We workshop solutions directly with merchants, validate them in real workflows, and refine based on their feedback. For example, while working on a CEDP integration, we initially considered a manual process, but during a demo call, the merchant realized they didn’t have access to product-level data at the time of payment. By involving their collections team, we confirmed this would be a heavy operational lift, so we pivoted to a connector approach. Responsibilities were split: the merchant handled their part, we built ours, and the solution was later validated with another merchant in a similar situation, who confirmed it worked with only minor tweaks.

That collaborative approach is core to how we operate: involve merchants and partners early, ensure solutions fit their processes, and validate across multiple users. Ultimately, if it doesn’t work for them, there’s no point in pushing it live.