You may have recently noticed some new fees on your Merchant Processing statements under the acronym FANF which stands for Fixed Acquirer Network Fees. They may also be reflected as Card Association Fees and no matter who processes your credit card transactions, your business will be impacted. Visa began charging the Fixed Acquirer Network Fee (FANF) on April 1st, 2012, while MasterCard’s comparable fees will take effect in July 2012. These are fees that all merchants accepting Visa and MasterCard will be paying regardless of the processor or acquiring bank they are set up with. So that you understand what this means to your business and how you process credit card transactions, we wanted to give you an overview of how they work.
The calculation of Fixed Acquirer Network Fees (FANF) is a complex process, as numerous variables are involved. There are 18 tiers of business size and volume, and a separate chart with 16 tiers determined by the volume of card not present transactions. The factors that impact the calculation of a merchant’s FANF accountability include:
- Card present transactions vs. card not present transactions
- Number of business locations
- Number of taxpayer IDs
- Gross monthly sales volume for all Visa-branded products
- Merchant Category Codes (MCCs)
Depending on the way these variables fluctuate, a merchant’s Fixed Acquirer Network Fees can change on a month to month basis. Certain types of businesses classed as “high volume” based on their Merchant Category Codes pay higher FANF rates than other businesses. “High Volume” MCC businesses include airlines, car rental businesses, car dealers, tire stores, gas stations, lodging, supermarkets, department stores, clothing stores, discount stores, wholesale clubs, furniture stores, electronic stores, theaters, and drug stores.
For a merchant not in a “high volume” category, with a single location which only processes card present transactions, the Fixed Acquirer Network Fee is $2.00. This rate increases with the number of locations, reaching $65.00 when the number of locations exceeds 4000. Merchants categorized as high volume pay a FANF rate between $2.90 with one location, and $85.00 with over 4000 locations. This fee is assessed per location.
SINCE DISTRIBUTORS DO NOT FALL INTO THE HIGH VOLUME CATEGORIES, THEY WILL PAY A FEE BASED ON THE NUMBER OF LOCATIONS IF THEY TAKE ONLY CARD PRESENT TRANSACTIONS AT ALL OF THEIR LOCATIONS.
VISA FANF Fees
|Tier||Number of Locations||Price per Location per Month|
|6||6 thru 10||$2.90|
|7||11 thru 20||$4.00|
|8||21 thru 50||$4.00|
|9||51 thru 100||$6.00|
|10||101 thru 150||$8.00|
|11||151 thru 200||$10.00|
|12||201 thru 250||$14.00|
|13||251 thru 500||$24.00|
|14||501 thru 1000||$32.00|
|15||1001 – 1500||$40.00|
|16||1501 – 2000||$50.00|
|17||2001 – 4000||$60.00|
|With cap of 4,001 maximum billable locations|
If any of your locations take Card Not Present transactions for Visa branded cards, they will also be assessing fees based on the chart below. It is all based on the reporting TAX ID number. These transactions typically occur when taking phone orders and payments on customer accounts.
Card Not Present fees
|Tier||Monthly Gross Sales volume||Fee Per Month|
|2||$50 – $199||$2.90|
|3||$200 – $999||$5.00|
|4||$1,000 – $3,999||$7.00|
|16||> or equal to $400,000,000||$40,000.00|
It is important to reiterate that no credit card accepting merchant is exempt from the new FANF fees (aside from charities). While we know this is an inconvenience for many smaller volume merchants and their bottom line, switching processors will not give you an opportunity to escape paying these fees, as these fees have been passed down by Visa to all processing banks in the US. If a processing bank promises that they will not charge FANF fees, understand that there is no free lunch, and you will end up paying these fees elsewhere to the processor as FANF fees have been universally passed down by Visa to all processing banks.