There are 4 merchant levels as defined by Visa, all merchants will fall into one of the four merchant levels based on Visa transaction volume over a 12-month period.
Transaction volume is based on the aggregate number of Visa transactions (inclusive of credit, debit and prepaid) from a merchant Doing Business As (‘DBA’). In cases where a merchant corporation has more than one DBA, Visa acquirers must consider the aggregate volume of transactions stored, processed or transmitted by the corporate entity to determine the validation level. If data is not aggregated, such that the corporate entity does not store, process or transmit cardholder data on behalf of multiple DBAs, acquirers will continue to consider the DBA’s individual transaction volume to determine the validation level.
Merchant levels as defined by Visa:
Level 1: Any merchant — regardless of acceptance channel — processing over 6M Visa transactions per year. Any merchant that Visa, at its sole discretion, determines should meet the Level 1 merchant requirements to minimize risk to the Visa system.
Level 2: Any merchant — regardless of acceptance channel — processing 1M to 6M Visa transactions per year.
Level 3: Any merchant processing 20,000 to 1M Visa e-commerce transactions per year.
Level 4: Any merchant processing fewer than 20,000 Visa e-commerce transactions per year, and all other merchants — regardless of acceptance channel — processing up to 1M Visa transactions per year.
* Any merchant that has suffered a hack that resulted in an account data compromise may be escalated to a higher validation level.