Revisiting Visa FANF
May 14th, 2012
Just last month, we told you about the newly imposed Visa Fixed Acquirer Network Fee (FANF). Introduced by Visa in response to the Durbin Amendment, FANF is affecting merchants and the payment industry in more ways than a simple price increase.
When Visa first announced the fee, which has technically been in effect since April 1st, they gave acquirers and merchants only 36 days notice. Such short notice was especially tough on payment processors because the new fee structure is setup in a way that processors have never seen before and therefore did not have the systems in place to account for..
So, why did Visa push through the Fixed Acquirer Network Fee so quickly? There doesn’t seem to be a good answer to that question. In fact, The Electronic Transactions Association (ETA) sent a request to Visa on behalf of acquirers, processors, and merchants asking for implementation to be delayed until all parties had a chance to review the complete details of the new fee and prepare for it properly.
The ETA’s request was quickly denied.
FANF is just another example of the card brands putting processors in a position to have to pass along new charges to their merchants.
“Any nominal increases we try to absorb the cost ourselves and avoid passing it to our merchants,” said Doug Mack, President of Payex. “Unfortunately in this case, Visa’s new fee structure is too significant for us to eat. We will, however, pass the charge along at cost,” he continued, “and not use it as a means to profit, as some processors are likely to do.”
The Fixed Acquirer Network Fee is determined from a somewhat complicated formula including card present vs. card not present charge types, merchant type, number of locations, and Visa gross monthly sales volume.
To help you understand how the new fees affect your particular business, the following tables lay out the charges for each merchant type and sale type.
Card Present (excluding High Volume MCCs)
Tier |
Locations |
Fee Per Location |
|---|---|---|
| 1-3 | 1-3 | $2.00 |
| 4 | 4 | $2.90 |
| 5 | 5 | $2.90 |
| 6 | 6 – 10 | $2.90 |
| 7 | 11 – 20 | $4.00 |
| 8 | 21 – 50 | $4.00 |
| 9 | 51 – 100 | $6.00 |
| 10 | 101 – 150 | $8.00 |
| 11 | 151 – 200 | $10.00 |
| 12 | 201 – 250 | $14.00 |
| 13 | 251 – 500 | $24.00 |
| 14 | 501 – 1,000 | $32.00 |
| 15 | 1,001 – 1,500 | $40.00 |
| 16 | 1,501 – 2,000 | $50.00 |
| 17 | 2,001 – 4,000 | $60.00 |
| 18 | 4,001 (max) | $65.00 |
Card Not Present, Fast Food Restaurants, Merchant Aggregators
Tier |
Monthly Gross Volume |
Fee Per Month |
|---|---|---|
| 1 | < $50 | $2.00 |
| 2 | $50 – $199 | $2.90 |
| 3 | $200 – $999 | $5.00 |
| 4 | $1,000 – $3,999 | $7.00 |
| 5 | $4,000 – $7,999 | $9.00 |
| 6 | $8,000 – $39,999 | $15.00 |
| 7 | $40,000 – $199,999 | $45.00 |
| 8 | $200,000 – $799,999 | $120.00 |
| 9 | $800,000 – $1,999,999 | $350.00 |
| 10 | $2,000,000 – $3,999,999 | $700.00 |
| 11 | $4,000,000 – $7,999,999 | $1,500.00 |
| 12 | $8,000,000 – $19,999,999 | $3,500.00 |
| 13 | $20,000,000 – $39,999,999 | $7,000.00 |
| 14 | $40,000,000 – $79,999,999 | $15,000.00 |
| 15 | $80,000,000 – $399,999,999 | $30,000.00 |
| 16 | >= $400,000,000 | $40,000.00 |
Card Present High Volume MCCs*
Tier |
Locations |
Fee Per Location |
|---|---|---|
| 1 | 1 | $2.90 |
| 2 | 2 | $2.90 |
| 3 | 3 | $2.90 |
| 4 | 4 | $4.00 |
| 5 | 5 | $4.00 |
| 6 | 6 – 10 | $4.00 |
| 7 | 11 – 20 | $5.00 |
| 8 | 21 – 50 | $5.00 |
| 9 | 51 – 100 | $8.00 |
| 10 | 101 – 150 | $12.00 |
| 11 | 151 – 200 | $18.00 |
| 12 | 201 – 250 | $25.00 |
| 13 | 251 – 500 | $35.00 |
| 14 | 501 – 1,000 | $45.00 |
| 15 | 1,001 – 1,500 | $55.00 |
| 16 | 1,501 – 2,000 | $65.00 |
| 17 | 2,001 – 4,000 | $75.00 |
| 18 | 4,001 (max) | $85.00 |
*High Volume Merchant Types & SIC Codes
The following business types qualify as high volume and are subject to the High Volume MCC table:
| 3000-3299, 4511 – Airlines 3300-3499, 7512 – Auto Rental 3500-3999, 7011 – Lodging 4411 – Steamship/Cruise Lines 4829 – Wire Transfer Money Order 5200 – Home Supply Warehouse Stores 5300 – Wholesale Clubs 5309 – Duty Free Stores 5310 – Discount Stores 5311 – Department Stores 5411 – Grocery Stores and Supermarkets 5511 – Car and Truck Dealers/ New / used |
5532 – Automotive Tire Stores 5542 – Automated Fuel Dispensers 5651 – Family Clothing Stores 5655 – Sports / Riding Apparel Stores 5712 – Furniture / Equipment Stores 5732 – Electronic Stores 5912 – Drugstores and Pharmacies 5943 – Stationary Stores 7012 – Timeshares 7832 – Motion Picture Theaters 5541 – Service Stations |
Of course, what all of this means is that merchants will have a brand new monthly fee to contend with. FANF is billed to all payment processors in the United States, who will have little choice but to pass the fee on to merchants.
Please feel free to weigh in. How do you feel these fees will impact your costs? Do you feel it will be necessary to increase your prices as a result of this imposed fee from Visa?
Make sure to watch WhatEveryMerchantShouldKnow for more updates, and sign up for our newsletter to receive all the latest industry news and advice.
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