When your business accepts Mastercard, you will pay a fee called the Acquirer License Fee or ALF. The payment network charges the ALF to acquirers as a fee to access their network. As a business owner, it’s important to understand what this fee is because it’s passed on to merchants as one of the costs of credit card processing.
What Is the Acquirer License Fee?
The ALF, also known as a License Volume Fee, is a fee the payment network assesses to acquirers as a charge to access their network. This fee is currently assessed for all non-PIN and credit processing volume and it’s billed as a pass-through fee with merchant services. The license fee is currently very small at just 0.0047%.
As a merchant, you will pay this fee on all MasterCard gross processing volume of your sales transactions that don’t use a PIN. The payment network will charge the fee to your credit card processor who will pass it on to you. Because this is an assessment fee, it can be stacked. This means more than one fee can be applied to the same transaction. MasterCard has 14 different fees that may apply to merchants who accept their cards.
Acquirer License Fee and International Transactions
There is a different rate when international transactions are involved. These transactions may be classified as domestic or foreign based on the region in which it’s settled. When the fee is internationally based, it’s called the Cross-Border Assessment Fee.
The domestic Cross-Border Assessment Fee is currently 0.60% and it applies when the merchant country is different than the country of the card issuer. The foreign Cross-Border Assessment Fee is 1.00% and charged to transactions when the merchant country is different than the country of the card issuer and the merchant currency code is not the same as the card issuer.
How to Find the ALF on Your Statement
You can locate the ALF you pay when your merchant services have an interchange plus pricing model. While credit card processing companies can use different terms for the ALF, it may be listed as a License Volume Fee, Acquirer License Fee, License Rate, or MC Acquirers License.