This is the latest installment in The Official Merchant Services Blog’s Knowledge Base effort. 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: we deliver 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 we will take another look at international processing, and the fees associated with accepting an international card. Yesterday we defined the MasterCard Cross Border Fee, and today we will explain the Visa International Service Assessment.
Visa implemented an international service assessment (ISA) fee of 40 basis points (0.40%) in April of 2008. This fee applies to all transactions involving a U.S. based business and a credit or debit card issued outside of the U.S. The ISA is also separate from interchange rates and from Visa’s standard assessment fee, which is currently 11 basis points (0.11%).
For example, the ISA fee of 0.40% will be added to a transaction where a customer uses a Visa-branded card issued out of the United States to buy something here in Delaware.
The ISA is one of two fees Visa currently charges for international card usage, the other is the International Acquirer Fee, a separate 45 basis point fee (0.45%), which applies under the exact same circumstances as the ISA. Visa began charging the IAF in October 2009.
The total fees Visa charges for a transaction involving an international card processed in the U.S. is the sum of the ISA fee (0.40%), the Visa standard assessment (0.11%), and the International Acquirer Fee (0.45%), which comes to almost a full percent above interchange, 96 basis points (0.96%).