Reading your processing statements can sometimes feel like trying to decipher hieroglyphics. There are so many fees with different names, acronyms, and rates that making heads or tails of it can quickly become overwhelming. But most of these fees fall under one shared group, commonly known as card brand, card assessment, or card association fees.
Understanding card brand fees is an important part of working with a payment processor, as some processors might take advantage of a lack of knowledge to charge you extra.
To that end, this article will cover the nature of card brand fees, how they are charged, and how to deal with them.
What Are Card Brand Fees?
Card brand fees are also known as card association, network, and assessment fees. In simple terms, these are fees charged by card associations for their services and are how brands like Visa, Mastercard, American Express, and Discover make a lot of their money.
Every time a credit or debit card is used, card associations charge a fee for their services. While these fees are supposed to go entirely and directly to them, some card processors might add an additional amount as a markup.
These markup fees can be negotiated, so it’s important to know the base costs of card brand fees.
How are these fees charged?
In most cases, if not all, card brand fees are charged either as a flat fee per transaction or as a percentage of transaction volume.
While some fees apply to all transactions, others are reserved for specific ones. Some of the fees for specific situations include:
- Refund fees
- Fees for transactions that don’t meet specific CPS requirements
- Fees for verifying a cardholder’s information without authorizing a transaction (sometimes known as a zero-dollar verification fee)
- Fees for cards for international cards
In some cases, you might be charged a card brand fee just for access and usage of the card brand’s network, such as with Mastercard’s NABU and Visa’s APF fees.
Mastercard Network Access Brand Usage Fee (NABU)
NABU is a flat fee charged by Mastercard for all authorized or refunded card transactions. The fee is the same for debit and credit cards, a flat $0.0195 per transaction or refund.
The fee could appear on a statement as NABU or Network Access Brand Usage Fee, though some processors might not list it or use a different name. Like most assessment fees, this one goes directly to Mastercard.
In most cases, card processors might pass the fee to a business at cost. However, some processors might choose to mark it up.
Visa Acquirer Processing Fee (APF)
Visa’s Acquirer Processing Fee, also known as Visa Authorization Processing Fee, is a flat fee for all authorizations acquired in the United States. In other words, if a business is located in the US, all Visa authorizations would receive this fee. An important note here is that the fee is charged on all authorizations regardless of if the authorization has been settled, unlike Mastercard’s NABU.
Another important note is that Visa has different fees for credit and debit transactions:
- APF for credit transactions: $0.0195 per item
- APF for debit transactions: $0.0155 per item
This fee is usually found under the Visa assessment charges, though it might also show up in a statement as ACQR Processor Fee or Network Access Fee. Sometimes a processor will lump it with other fees.
Assessment vs. Interchange
To confuse the issue, there is another very similar type of fee you need to be aware of when it comes to your processing statement, interchange fees.
These might look like card brand fees at first glance, but they are their own separate thing. The main difference is that while card brand fees are paid to the card association, interchange fees are paid to the card’s issuing bank.
Card Brand Fees on Your Processing Statement
Your payment processor’s pricing structure plays a factor when it comes to understanding your card brand fees, as well as how you pay them. Different pricing structures will reflect these fees in their own way or not at all.
There are three types of structures to consider regarding how your card brand fees are reflected on your statement: flat rate, tiered, and interchange plus.
Flat rate
In a flat-rate pricing structure, you’ll usually pay the same for the majority of transactions, with some exceptions such as card-not-present or international transactions. In flat-rate pricing structures, all wholesale costs are included in your rate, so you won’t see any card brand or interchange fees itemized on your statement.
Tiered
With tiered pricing, your transaction rates will depend on the type of tier the transaction falls into, with some types, such as CNP having higher rates. In this pricing structure, the processor might separate the card brand fees from the transactions and itemize them together with their fees.
Interchange Plus
In an interchange-plus pricing structure, the processor usually passes card brand and interchange fees at cost and then includes their service fees. With this pricing structure, you should be able to see every fee itemized and specified on your merchant statement.
Card Brand Fees by Processor
Each card brand and network have their own fees. Some of these are:
Visa
By volume
- Credit Assessment – 0.14% on gross monthly volume.
- Debit Assessment 0.13% on gross monthly volume.
- International Service Assessment (ISA) – 1.00% for transactions in USD with cards issued outside the US and 1.40% when done in the cardholder’s currency.
By item
- Acquirer Processing Fee (APF) – $0.195 for credit and $0.0155 for debit transactions inside the US.
- Credit Voucher Fee – $0.0195 for credit card refunds and $0.0155 for debit and prepaid refunds.
- Zero Dollar Verification Fee – $0.025 for cardholder information verification without transaction authorization.
Mastercard
By volume
- Assessment – 0.13% to all sale transactions.
- Assessment for transactions above $1,000 – 0.01%, same rules as above.
- Acquirer License Fee (ALF) – 0.0075% on gross transaction volume
- International Assessment Fee – 0.60% for US merchants processing payments with cards issued outside the US with USD, and 1.00% for using another currency.
By item
- NABU – $0.0195 for all authorizations within the US
- AVS Fee (CNP) – $0.01 for card-not-present transactions
- Account Status Inquiry Fee – $0.025 for verifications within the same region and $0.03 when in different regions.
- Processing Excellence Fee – A fee for not meeting Mastercard’s best practice rules. It can be issued for pre-authorization ($0.045), undefined authorizations ($0.045), excessive authorizations ($0.100), and nominal authorizations ($0.045)
Discover
By volume
- Standard Assessment – 0.13% of gross transaction volume
- International Processing Fee – 0.55% for transactions with cards issued outside the US.
- International Service Fee – 0.80% same rules as the International Processing Fee.
By item
- Data Usage Fee – $0.0195 for all authorized transactions
- Network Authorization Fee – $0.025 for all authorized transactions
American Express
By volume
- Standard Assessment – 0.15% of gross transaction volume
- International Assessment – 0.40% for card issues outside the US
- Card-Not-Present Surcharge – 0.30%
- Technical Specification Non-Compliance – 0.75% for transactions that don’t meet Amex’s standards.
By item
- None
The Problem with Card Brand Fees
Card brand fees can be opaque, difficult to differentiate, and hard to understand for a variety of reasons, including:
- Card brands don’t display them on their websites, nor do they provide you with information about them
- One transaction can incur multiple fees
- The fees can change over time
- The fees might have different names or abbreviations in your statement
- Your processor might lump some of the fees together.
- Some of the fees might be located in different sections of your statement.
All of this obfuscation can make it frustrating to deal with these fees, not to mention present a problem when trying to discern if there are any fees you shouldn’t be paying for in your statement.
How to Manage Card Brand Fees
While card brand fees can be pretty obtuse, there are ways to prepare yourself better for them. Here are some tips for dealing with your card brand fees:
- Pay close attention to your pricing model to see which fees apply.
- Request a list of card brand fees from your payment processor.
- Confirm the fees with a secondary source.
- Keep track of past fees on your statements to see if there are new ones or changes to existing ones.
- Don’t focus solely on names; look at the rates and numbers.
- Ask your payment processors how they handle card brand fees.
Conclusion
Since card brand fees are part of your business costs, you must understand their role in credit card processing and how to find them. If you are not aware of the rates for fees or how they are charged, you could end up being overcharged by a card processor with a high markup.
While they are necessary for processing payments through the different card brand networks, being familiar with the rates at cost will ensure that you get fair treatment from your processor or allow you to find a better one.
