Visa imposed a monthly fee in July 2012 called the fixed acquirer network fee (FANF) to incentivize businesses to route transactions to Visa. This implementation was a direct result of the Durbin Amendment, and was intended to level the competitive landscape for Visa.
The incentive was simple: the more transactions routed to Visa, the lower the cost per transaction. Overall, Visa's acquirer fees would be reduced in aggregate. Let’s go over how a FANF fee is assessed.
How Visa Determines the Fixed Acquirer Network Fee
Not every business will pay the same amount for the FANF fee, and calculating the cost is complex. The following factors are taken into consideration:
- Business size and processing volume: This includes the number of locations tied to a unique tax ID number and the total Visa processing volume.
- Acceptance methods: These are determined by whether a business takes card-present or card-not-present transactions.
- The Merchant Category Code (MCC): This categorizes businesses by industry and associates levels of processing with certain codes.
There are numerous tiers to categorize your business that are grouped by number of locations, processing volume and whether your business is considered card present or card not present. These tiers can be found in Visa’s Interchange guide, which is updated and released every April and October.
Visa Fixed Acquirer Network Fee Will Increase
Nearly six years after the implementation of FANF, Visa has announced that it will be increasing rates for businesses that fall into select table 2 tiers, which are applicable to card-not-present businesses, businesses using self-checkout terminals (excluding auto fuel dispensers) and fast food restaurants. The increases will go into effect on April 1, 2018 and are as follows:
|Fee Item Name||Tier Definition||Current Rate||Rate as of April 1,2018|
|Visa FANF 2 Tier 08||$200,000 - $799,999 Gross Monthly Volume||$120||$160|
|Visa FANF 2 Tier 09||$800,000 - $1,999,999 Gross Monthly Volume||$350||$450||Visa FANF 2 Tier 10||$2,000,000 - $3,999,999 Gross Monthly Volume||$700||$1,000|
|Visa FANF 2 Tier 11||$4,000,000 - $7,999,999 Gross Monthly Volume||$1,500||$2,000|
|Visa FANF 2 Tier 12||$8,000,000 - $19,999,999 Gross Monthly Volume||$3,500||$4,000|
|Visa FANF 2 Tier 13||$20,000,000 - $39,999,999 Gross Monthly Volume||$8,000||$70,000|
|Visa FANF 2 Tier 14||$40,000,000 - $79,999,999 Gross Monthly Volume||$15,000||$16,000|
|Visa FANF 2 Tier 15||$80,000,000 - $399,999,999 Gross Monthly Volume||$30,000||$45,000|
|Visa FANF 2 Tier 16||$400,000,000+ Gross Monthly Volume||$40,000||$70,000|
If your business falls into any of the table 2 tiers listed, expect to see an increase in pass-through fees come April 2018. Check your statement to confirm that you’re being charged the amount that Visa announced, as some providers practice unethical billing and will tack on their own markup to various fees.
Do you have questions regarding the various volume tiers noted above? Do you have questions about other fee increases in 2018? We’d love to hear from you.