Insights

Card Network Nuisance Fees

The card networks have been increasing the number and value of assessments and dues, or commonly known as nuisance fees, over the years.  As the outline below shows, Visa has 12 different fees and MasterCard has 14 fees that can apply to merchants accepting their cards. These assessments and dues are in addition to interchange fees.  About 10 years ago, these fees averaged 0.12% of sales.  Today, they can easily exceed 0.20% of sales based on merchant’s average ticket and card mix.  American Express has also followed Visa/MasterCard in recent years by unbundling their fees…that’s a topic for another post. 

VISA

  1. 0.11%– Debit Assessment – This assessment applies to gross Visa debit transaction volume.
    0.13% – Credit Assessment – This assessment applies to gross Visa credit transaction volume.
    Update: In January 2015, Visa raised its assessment on credit volume from 0.11% to 0.13%. The debit volume assessment did not change from 0.11%.
  2. $0.0195– Acquirer Processing Fee (APF) – Credit
    The Acquirer Processing Fee applies to all U.S.-based credit card authorizations acquired in the U.S. regardless of where the issuer/cardholder is located. If your business is based in the U.S., the acquirer processing fee will apply to all Visa credit card authorizations.
  3. $0.0155– Acquirer Processing Fee (APF) – Debit
    On April 1, 2012, Visa began charging a separate lower APF of $0.0155 for transactions involving a debit card.
  4. $0.10– Transaction Integrity Fee (TIF)
    Effective April 13, 2012, Visa will begin charging a Transaction Integrity Fee (TIF) of $0.10 on transactions involving Visa debit and prepaid cards that do not meet CPS requirements.
  5. Variable– Fixed Acquirer Network Fee (FANF)
    Effective April 1, 2012, the FANF is a monthly fee that varies based on processing method, number of locations and volume. See the Fixed Acquirer Network Fee calculator to determine the FANF for your business.
  6. $0.0025– Settlement Network Access Fee — Also called a Visa Base II Fee
    Applies to all U.S.-based settlement transactions. If your business is based in the U.S., the settlement network access fee will apply to all Visa settlement transactions.

Note: The Settlement Network Access Fee (Visa Base II Fee) and Acquirer Processing Fee will both apply to the vast majority of credit card transactions for U.S.-based businesses bringing the total fee to $0.022

  1. $0.0047– Kilobyte (KB) Access Fee
    Visa’s kilobyte fee is charged on each authorization transaction submitted to Visa’s network for settlement.
  2. $0.045– Misuse of Authorization Fee
    The Misuse of Authorization Fee applies to Visa authorizations that are not followed by a matching clearing transaction (or in the case of a cancelled or timed out authorization, not properly reversed).
  3. $0.10– Zero Floor Limit Fee
    Visa’s Zero Floor Limit applies to cleared transactions that can’t be matched to a previously approved or partially-approved authorization. In short, it applies to settlement transactions submitted without a proper authorization.
  4. $0.025– Zero Dollar Verification Fee
    The Zero Dollar Verification fee applies to Zero Dollar Verification messages (approved and declined). Zero Dollar Verification messages include the verification of the card account number, address verification (through AVS), Card Verification Value 2 (CVV2) and Single Message System (SMS) acquired Account Verification authorizations. The Visa Misuse of Authorization Fee does not apply to these requests. The fee applies when you want to verify a cardholder’s information without actually authorizing an amount of their card.
  5. 0.40%– International Service Assessment Fee
    The International Service Assessment Fee applies to U.S. acquired transactions paid for with a card issued outside of the U.S.

Update: Effective April 18, 2015, Visa will modify the U.S. Acquirer International Service Assessment from 0.40% to 0.80% for non-US issuers and 1.20% for non-US issuers + non-US dollars.

  1. 0.45%– International Acquirer Fee
    The International Acquirer Fee applies under the same circumstances as the International Service Assessment Fee noted above.
  2. $0.001– Risk Identification Fee
    Effective April 1, 2012, Visa has eliminated the risk identification fee

MASTERCARD

  1. 0.12%– Assessment (Transactions less than $1,000)
    The assessment applies to gross MasterCard transaction volume.
    Update: In January 2015, MasterCard increased its assessment by 0.01% on all signature debit and credit transactions with an amount of $1,000 or less from 0.11% t0 0.12%.
  2. 0.13%– Acquirer Brand Volume Fee (Transactions greater than $1,000)
    Update: Effective January 15, 2012 MasterCard’s Acquirer Brand Volume Fee increased from 0.12% to 0.13%. This assessment applies to consumer and business credit volume on transactions of $1,000 or greater. This assessment does not apply to signature debit transactions regardless of size.
  3. 0.01%– Digital Enablement Fee – Effective January 2015, MasterCard will begin charging a Digital Enablement Fee. This fee will be assessed on MasterCard card-not-present sales volume involving signature debit, consumer credit and commercial credit transactions.
  4. $0.0195– Network Access and Brand Usage Fee (NABU)
    Update: Effective January 8, 2012 the NABU fee will apply to U.S.-based authorization transactions regardless of whether the transaction is settled. Prior to January 8, 2012 the Network Access and Brand Usage Fee applies to all U.S.-based settled transactions.
    Update: Effective June 30, 2013 the NABU fee will be increased to $0.0195, and it will apply to both authorization and refund transactions.
  5. $0.0044– Kilobyte (KB) Access Fee
    MasterCard’s kilobyte fee is charged on each authorization transaction submitted to MasterCard’s network for settlement.
  6. 0.0045%– Acquirer License Fee (ALF)
    Effective April 2012, MasterCard will begin charging 0.0045% as an Acquirer License Fee assessed on gross MasterCard processing volume. This fee is also referred to by several processors as aLicense Volume Fee.
  7. 0.40%– Cross Border Assessment Fee (Domestic)
    The domestic Cross-Border Assessment Fee applies to U.S. acquired transactions paid for with a card issued outside of the U.S. and settled in USD.

Update: Effective April 17, 2015 this fee ins increasing from 0.40% to 0.60%.

  1. 0.80%– Cross-Border Assessment Fee (Foreign)
    The foreign Cross-Border Assessment Fee applies to international transactions settled by U.S.-based merchants in a currency other than USD.

Update: Effective April 17, 2015 this fee ins increasing from 0.80% to 1.00%.

  1. 0.85%Acquirer Program Support Fee (Increased to 0.85% from 0.55% on April 1, 2013)
    The Acquirer Program Support Fee applies under the same circumstances as the Cross-Border Assessment Fee (Domestic) noted above.
  2. $0.0075– AVS Fee (Card-Not-Present)
    MasterCard charges a fee each time a merchant access the address verification service when processing a transaction. MasterCard’s AVS fee is a little higher for card-not-present merchants than it is for card-present merchants. MasterCard’s AVS for card-present businesses is listed just below.
  3. $0.005– AVS Fee (Card-Present)
  4. $0.0025– Card Validation Code Fee Effective October 21, 2013, MasterCard will implement a Card Validation Code 2 (CVC2) transaction fee of $0.0025. This fee will be charged on transactions acquired in the United States with the CVC2 (three digit code on the back of the customer’s card) included in the transaction for authorization and the CVC2 response value equals ’M’ (Match) or ’N’ (Invalid/did not match). The fee will not apply to Account Status Inquiry (ASI) requests.
  5. $0.025– Account Status Inquiry Fee
    The account status inquiry fee is charged for transactions where a merchant does actually authorize an amount on a cardholder’s account, but instead, validates aspects of her account. Account status inquiry transactions may include requests for address verification service (AVS), card validation code (CVC2), or both. MasterCard implemented the account status inquiry service on June, 14 2011 in place of support for AVS-only transactions.
  6. $0.055– Processing Integrity Fee (Card-Present, Card-Not-Present, No reversal)
    Effective June 14, 2011 MasterCard began charging acquirers a Processing Integrity Fee of $0.045 to encourage merchants to abide by proper transaction authorization standards. MasterCard increased the Processing Integrity Fee by $0.01 to $0.055 on November 1, 2011. The Processing Integrity Fee will apply in the following instances:

    • Card-present: Transactions are not settled, cleared, or reversed within 24 hours of the original authorization transaction/request
    • Card-not-present: Transactions are not settled, cleared, or reversed within 72 hours of the original authorization transaction/request
    • No reversal: An authorization transaction cannot be matched to a corresponding settlement record after a period of 120 days
    • Exempt merchants: Travel and entertainment merchants classified as MCC 3351-3441, 3501-3999, 4411, 7011 and 7512 are exempt from the Processing Integrity Fee

DISCOVER

  1. 0.105%– Assessment
    The assessment applies to gross Discover card transaction volume.
    Update: On April 13, 2012, Discover’s assessment increased from 0.10% to 0.105%.
  2. $0.0185– Data Usage Fee
    The Data Usage Fee applies to all U.S.-based authorization transactions.
  3. $0.0025– Network Authorization Fee
    Discover will begin charging a Network Authorization Fee effective October 1, 2013. This fee will apply to all Discover network authorizations and will replace the previously assessed Data Transmission Fee, which applied only to settled Discover transactions. The amount of the Network Authorization Fee and the Data Transmission Fee are the same, but the Network Authorization Fee will apply to a greater number of transactions.
  4. $0.0025– Data Transmission Fee (No longer charged)
    The Data Transmission Fee applied to all settled Discover transactions, and was replaced by the Network Authorization Fee is October 2013.
  5. 0.40%– International Processing Fee
    The International Service Fee applies to U.S. acquired transactions paid for with a card issued outside of the U.S.
  6. 0.55%– International Service Fee
    The International Service Fee applies under the same circumstances as the International Processing Fee noted above.

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