This is the latest installment in The Official Merchant Services Blog’s Knowledge Base effort. Well we want to make the payment processing industry’s terms and buzzwords clear. We want to remove any and all confusion merchants might have about how the industry works. Host Merchant Services promises: the company delivers personal service and clarity. So we’re going to take some time to explain how everything works. This ongoing series is where we define industry related terms and slowly build up a knowledge base and as we get more and more of these completed, we’ll collect them in our resource archive for quick and easy access. Today’s term is Network Access and Brand Usage (NABU) Fee. We chose this today because of all of the recent changes to Interchange fees released by the major credit card companies.
Network Access and Brand Usage Fee
The Network Access and Brand Usage (NABU) fee was created by MasterCard in 2009, and is fee imposed by MasterCard for all U.S. issued card transactions settled with MasterCard by a U.S. merchant. Effective January 8, 2012 MasterCard’s NABU fee was applied to authorization transactions instead of settlement transactions. MasterCard charges $0.0185 on all settle or refunded credit and signature debit card transactions for its Network Access Brand Usage fee. Revenue generated from the NABU fee goes directly to MasterCard. It is not collected by credit card processors or issuing banks.
MasterCard began charging the NABU fee is April of 2009. Prior to the $0.0185 charge, MasterCard assessed a $0.005 Acquirer Access Fee to transactions run through its network.
Since revenue from the NABU fee goes directly to MasterCard, most processors assess the fee to businesses at cost. However, in the case of tiered pricing the NABU fee is bundled with a business’s general qualified, mid-qualified and non-qualified rates. Although uncommon, it is possible for processors to markup the NABU fee even for businesses that are billed via more transparent interchange plus pricing.
To avoid confusion, the NABU fee is NOT related to: