Recent changes governing the credit card processing industry have significantly altered the ways that credit card companies can impose fees on card accepting merchants. Among these regulations is a hard limitation on debit card swipe fees (known as the Durbin Amendment). In order to make up some of the lost revenue from the removal of these fees, major credit card companies like Visa and MasterCard have instituted a different sort of fee for credit card processors, who will pass those fees on to their merchants – especially “high risk” merchants who carry more risk. 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.
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