Some charges are avoidable – and a few aren’t. When selecting and using a payment company, you have to be able to determine which charges you pay to create profit, and that are really from the charge card systems. Where will the Visa FANF fee squeeze into all of this?
Within our article on interchange-plus prices, we demonstrated you the way a portion of the processing rate would go to cover the particular price of processing which the rest would go to the company to pay for their very own costs and generate some profit. Apart from your rates, you may have many different charges in your processing statement that provide exactly the same purpose – since the cost suffered by the company and generating profit. PCI compliance charges are a good illustration of this – where it can be hard to inform what portion is really required to cover cost, and just what portion is simply a profit producer for the provider
The Visa FANF (Fixed Acquirer Network Fee) is extremely different. This fee really generates no profits for the provider whatsoever. There isn’t any sense attempting to negotiate it, because – like interchange and assessment charges – your processor has simply no control of it.
What’s the FANF Fee?
Simply put: Visa devised the FANF (formerly referred to as Network Participation Fee or NPF) to compensate for lost revenue in the so-known as Durbin Amendment that instated new rules regarding payment processing. Sounds pretty stupid? Well, it’s. It’s a junk fee which i would let you know to refuse in the event that was a choice. As the US Department of Justice antitrust division opened up a brand new analysis this year on Visa’s debit transactions practices – incorporated the FANF fee – the charge still stands at this time. Unless of course you need to generate a protest or perhaps a rally, there is not much that you can do.
What’s Going To the Visa FANF Fee Set You Back?
The Fixed Acquirer Network Fee is calculated monthly, but billed quarterly for that preceding quarter. In case your business are operating in a card present atmosphere (i.e., your clients can be found once the transactions occur), your cost is going to be minimal generally. If you are operating inside a card not preset atmosphere, then your fee gets to be more substantial. (Junk food also falls into this category for whatever reason.)
Visa makes fee calculation just a little complicated. Your fee is determined by the next factors:
- Should you be employed in a card present atmosphere (aside from junk food), does your Merchant Category Code (MCC) correspond using their listing of “high volume” groups? If that’s the case, count on paying a little more. See below.
- Should you be employed in a card present atmosphere (aside from junk food), then the number of locations have you got? More locations equals greater fee.
- Should you be employed in a card not present atmosphere (or junk food), then what’s your monthly product sales? Greater processing volume equals greater fee.
- Are you currently a charitable or social service organization (MCC 8398)? If that’s the case, your FANF fee could be waived.
High volume MCCs include:
- 3000-3299, 4511 Airlines
- 3300-3499, 7512 Auto Rental
- 3500-3999, 7011 Lodging
- 4411 Steamship / Cruise Companies
- 4829 Wire Transfer Money Order
- 5200 Home Supply Warehouse Stores
- 5300 Wholesale Clubs
- 5309 Duty Free Stores
- 5310 Discount Stores
- 5311 Shops
- 5411 Supermarkets and Supermarkets
- 5511 Vehicle and Truck Dealers / New / Used
- 5532 Automotive Tire Stores
- 5541 Service Stations (Without or with Ancillary Services
- 5542 Automated Fuel Dispensers
- 5651 Family Clothes Shops
- 5655 Sports / Riding Apparel Stores
- 5712 Furniture / Equipment Stores
- 5732 Electronic Stores
- 5912 Drugstores and Pharmacies
- 5943 Stationery Stores
- 7012 Timeshares
- 7832 Movie Theaters
According to these details, you should use the next FANF charts to calculate your fee:
1. Card Present Companies (Not “High Volume”)
2. “High Volume” Card Present Businesses
3. Card Not Present Companies (and Junk Food)
The Conclusion on Visa FANF
Processors don’t prefer to disclose this fee, most likely because retailers think that it’s negotiable or don’t understand that all processors need to pass on the very same cost here. This regrettably leads to numerous pissed off and confused retailers once they check this out on their own statement the very first time. With thin margins, one hundred dollars each year can produce a difference on the top from the charges you already pay. While there’s nothing that you can do to avert this fee, you are able to avoid other charges like tiered prices surcharges, PCI compliance charges and early termination charges.
In credit processing as well as in everything, remember to achieve the tranquility to simply accept what you cannot change, the courage to alter what you can, and knowledge to understand the main difference. You will save lots of headaches.
Best of luck, and take a look at our greatest rated payment processors!