VISA'S NEW FEE: FANF (Fixed Acquirer Network Fee)

Sunday, April 15, 2012

It is a good thing that accepting credit cards has proven to increase the amount of money that customers spend at most businesses!  The complex pricing structure and numerous fees associated with the credit card processing industry, have always been a concern to businesses. 

pricingpressureMost merchants in the U.S. are about to repay some of the savings they realized from the Durbin amendment that became effective October 2011. Beginning with April 2012 processing volume, Visa is implementing new fees and increasing some interchange rates that will cost most merchants from a few dollars to a few hundred thousand dollars per month.  It is important to communicate with your processing company to determine the impacts on your bottom line.

The most significant of all the new fees and rates changes is the introduction of  Visa’s Fixed Acquirer Network Fee (FANF). Effective for activity beginning April 1, 2012, this fee will apply to the acceptance of all Visa-branded products. This fee is charged to a merchant’s acquirer or credit card processor based on a merchant’s size and number of locations. Most processors have already announced that they intend to pass this fee on to their merchants. The calculation of this fee is extremely complex as it is based on a number of variables, including:

  • Number of taxpayer IDs
  • Card present vs. card not present
  • Merchant Category Codes (MCCs)
  • Number of locations
  • Visa gross monthly sales volume

Visa is implementing this fee to recoup some revenue lost from the implementation of the Durbin amendment. “Debit regulation has altered the competitive landscape,” Visa noted recently. The new fee structure aims to lower the “cost of Visa acceptance, while allowing continued investments” in the network’s development. Some analysts estimate that FANF will generate between $400 & $900 million in revenue per year for the company. Although Visa contends that this fee will be 'net neutral' to their bottom line, it is difficult to see how. Many investors have already factored in this fee to Visa’s bottom line and have sent the stock to an all-time high.



TO ESTIMATE YOUR FANF FEES, PLEASE EMAIL YOUR REQUEST TO OUR TEAM AND WE WILL REPLY WITHIN 24 HOURS TO YOUR REQUEST.  (Click the HELP Sign) ***Not a TMC Merchant? Include the information listed below in your request.  

MasterCard will follow by introducing a fixed Annual License and Registration Fee (ALRF) that becomes effective July 2012. This fee is assessed to acquirers based on their total MasterCard annual sales volume. Few acquirers have noted that this fee roughly equates to half a basis point or 0.005% of MasterCard sales volume, and that they intend to pass this fee on to their merchants.

It is important for merchants to understand their liability for these fees and seek out ways to manage the increased cost.  It is equally important for merchants to consider their Durbin Amendment savings and contrast that with these new fees!  Remember, when the Government involves itself in any industry and affects revenue-  businesses (including visa ) will always find a way to recoup the losses.

***If you are NOT a TMC merchant, please include the following information in your emailed request:

  • Are you a Fast Food Restaurant?
  • What is your Monthly Visa Activity?
  • How do you process most (50% or more) of your transaction (card present or not)
  • Business Type & How Many locations?  





Cheri Perry 4/15/2012

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