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Posts Tagged ‘Visa Mastercard Fees’

We knew it wouldn’t be long before we saw the industry squirm around the Durbin Amendment that gave Merchants a break on Credit/Debit cards from the Big Banks.   On April 1, 2012 the bank card networks introduced new fees that will almost certainly be universally passed on to Merchants.

New MasterCard Fees

New Fees Alert

MasterCard Inc. is adding two new network fees and is expected to introduce a new debit interchange rate in the controversial small-ticket sector.

New Visa  Fees

The most significant fee is Visa Inc.’s new Fixed Acquirer Network Fee (FANF).   Merchants won’t actually be affected until July. The FANF is a monthly fee that will affect all merchants, but, will be collected quarterly.

These new fees are different than interchange in that they are booked as Visa’s own revenue instead of being paid to card issuers (Banks), like interchange.

Like everything else in Merchant Services, FANF is confusing and complicated so I’ll try to break it down to bite-sized pieces. The MCC  (VISA Merchant Category Classification Code) you are designated by plays a role in the amount of the FANF charged each month.

The main factor in determining the amount of the FANF is whether a business processes the majority of its transactions in a card present or card not present environment.

For card present businesses like retailers

The amount of the Fixed Acquirer Network Fee for card present businesses will be based on the number of locations.  Businesses with one location will be charged $2 – $2.90 a month, up to $85 a month for businesses with 4,000 or more locations.  Again, this will show up quarterly on your statement.

For card not present businesses like e-commerce operations

For card-not-present merchants, Third Party Merchant Aggregators1, and fast-food restaurants, the monthly fee will be assessed based on Visa volume and range from $2 for sales of $50 or less up to $40,000 for merchants with more than $400 million in gross sales. The fee table in this category reportedly has at least 16 tiers.

E-Commerce will be hit harder

A card-not-present business processing between $8,000 and $39,999 will be hit with a Fixed Acquirer Network Fee of $15 a month opposed to just $2 for a card present business with similar volume and one location.  (Remember, more locations, though means more fees.)

Charities

Visa will waive the FANF for charitable organizations classified under merchant category code 8398. Exactly how the fee will be waived isn’t quite clear at the moment, but early indications are that Visa will charge the FANF and then provide a rebate at a later date.

1Third party payments aggregation (TPPA) is a description used for merchants that are selling a product or service that they do not own. The best example of a TPPA (aggregator) is PayPal. They simply facilitate the exchange of money between two parties.

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