What is FANF?

The Fixed Acquirer Network Fee (FANF) is a new fee instituted by Visa. It began on April 1, 2012 as a response from Visa to deal with the losses the credit card company was set to incur through the Durbin Amendment’s hard cap on debit swipe fees. The fee affects the credit card processing industry, both brick and mortar businesses and e-commerce merchants.

FANF applies to the acceptance of all Visa-branded products and is based on both the size and the number of merchant locations. That may seem a little tricky to follow, but we break it down for you here: The initial FANF fee was based on volume reported in July 2012. Visa required U.S. acquirers to provide new merchant location reporting for the tracking of this fee. The new reporting requirements include a monthly breakdown of acquired merchants, number of merchant locations, and merchant sales volume by merchant Taxpayer ID.

For Card Present merchants, with the exception of Fast Food Restaurants, a merchant Taxpayer ID with physical locations is assessed FANF on a per-location rate basis. For example, Card Present Merchants with one to three locations will see a pass through per location per month fee of $2. Price per location per month increases according to the number of locations – upwards of $65 month for merchants exceeding 4000 locations. Card Present High Volume MCC Merchants with one to three locations see a pass through per location per month fee of $2.90. Price per location per month will increase according to location — upwards of $85 month for merchants exceeding 4000 locations.

Customer Not Present, merchant aggregators and merchants primarily operating as Fast Food Restaurants (MCC 5814) are assessed based on gross merchant sales volume originating from any Visa-branded card. Merchants that fall into this category with monthly gross sales volume ranging from less than $50 a month on the low end will see a $2 a month fee- to merchants with gross sales exceeding $400 million at a $40,000 a month fee. There are some 18 tiers, with a merchant falling into a volume tier of $8,000 to $39,999 a month seeing a new $15 per month FANF fee.

Visa also waives the FANF for eligible Charitable and Social Service Organizations (MCC 8398). The FANF waiver for Charitable and Social Service Organizations is provided through a quarterly rebate process that Visa has indicated will be defined at a later date.

Host Merchant Services image of Visa CEO Joe Saunders

The United States Department of Justice antitrust division opened an investigation March 13 into Visa Inc.’s PIN-debit strategies. FANF is a key element in the investigation. There have been no results reported on that investigation as of September 1, 2012.

To find out more about all the new fees from Visa, MasterCard and Discover added in 2012, click THIS LINK and read our Article about them.