Calculating Your CEDP Savings Opportunity With Pagos

If you process commercial card transactions in the United States, you need to be thinking about Visa's Commercial Enhanced Data Program (CEDP). We covered the details of the program in a previous blog post, but here’s the gist: Visa is replacing its legacy Level 2 and Level 3 interchange programs with CEDP, a stricter, verification-driven approach to enhanced data. 

The stakes are real. Merchants who pass high-quality invoice-level data on eligible transactions can earn up to a 20 basis point interchange reduction (the exact amount varies by card product); those who submit enhanced data that doesn't meet Visa's quality bar will see no savings and must still pay a five basis point participation fee. Payments and finance teams must now weigh whether CEDP participation is worth it. If you have to pay regardless of whether or not you actually receive any interchange reductions, will you come out on top?

That answer depends on factors only you can know. How much of your volume runs on eligible commercial cards? How many transactions are you sending enhanced data for? How confident are you in the quality of that data? 

To help you work through that calculation, we have added a new CEDP tab to the Opportunities dashboard of Pagos Insights.

What Is the CEDP Calculator?

The existing Opportunities tabs in Pagos Insights use your clean payments data to estimate potential savings should you pursue strategies like passing L2/L3 data, employing network tokens, and pursuing alternative debit routing. Instead of demonstrating static savings estimates in the new Visa CEDP Calculator tab, we built an interactive tool for calculating your potential savings or costs from participating in CEDP:

The CEDP calculator asks you to provide two inputs:

• Percentage of transactions with enhanced data - You may be set up to pass enhanced data in some flows but not others, or only through certain processors. Estimate the percentage of your total eligible transactions for which you're currently submitting enhanced data.

• Percentage enhanced data quality - Passing any enhanced data, regardless of whether or not it meets Visa’s standards, costs you money. Estimate what percentage of the enhanced data you submit actually meets Visa's quality standards and would receive the interchange reduction.

We built this as an interactive calculator because ultimately only you know how many transactions you pass enhanced data for and the quality of that data. This ensures your savings estimates are more accurate and reliable.

How the Calculator Works

The CEDP calculator only demonstrates data for Visa commercial card transactions processed in the United States on eligible card product codes. We pull your eligible volume automatically from your ingested Pagos data. 

From there, the two sliders let you model your specific situation. Use Participation Rate to estimate the percentage of your total eligible volume that includes enhanced data. If you're unsure how much enhanced data you’re passing, start with a conservative estimate and adjust from there. 

The Data Quality Rate slider estimates how often your enhanced data meets Visa’s high quality standards. This requires an honest internal assessment: if you're passing structured, accurate invoice-level detail (item descriptions, quantities, taxes, freight), you can be more optimistic; if your enhanced data is more templated or inconsistent, set this slider lower. You can use your historical cost data to inform this estimate (and coming soon, Pagos may be able to help!).

With these two inputs, the calculator takes the interchange savings from qualifying transactions, subtracts the participation fee applied to all transactions where enhanced data is submitted, and surfaces a single net estimated savings figure. That bottom line identifies whether participating in CEDP is likely to save or cost you money given your current data quality and participation levels.

This lets you run through potential scenarios: What if you invested in improving your data quality from 60% to 85%? What if you expanded enhanced data submission to more of your transaction flows? The calculator makes it easy to see how those changes would move the needle on your actual savings.

Getting Started

You'll find the new Visa CEDP Calculator in the Opportunities section of Pagos Insights. Your eligible volume will populate automatically; from there, use the sliders to reflect your situation and see your net estimated savings.

If you're unsure where to start with the data quality estimate, we recommend initiating a conversation with your payments provider or conducting an internal review of what's actually being submitted in your enhanced data fields. The cleaner and more complete your line-item data, the better your chances of qualifying for the lower interchange rates.

Reach out to the Pagos team if you have questions about how to interpret your CEDP savings estimates. Not working with Pagos yet? Contact us today to set up a demo!