The Complete Guide To Card Brand Fees For Merchant Accounts

So you signed up for a merchant account, and you’re reviewing your processing statement for the first time. Or maybe you’re filling your application and see a complicated chart full of fees with names you can’t understand. Perhaps you simply followed a link from one of our other articles that didn’t give details on what a card brand fee is.

So what are all these fees? Why are some stated in percentages and others listed as flat-rate? What on earth is a NABU or FANF? Did your credit card processor just make them up to nickel and dime you to death?

The numbers and dubious acronyms you are looking at are often called card brand fees, card association fees, card network fees, or card assessment fees. They are legitimate fees (no comment on whether the companies should be charging you these fees.)  They can be transactional, scheduled, or incidental.

These fees are what the credit card associations, like Visa, Mastercard, American Express, and Discover, charge for their services every time a credit card is used. The money goes to them, and your card processor isn’t supposed to keep any portion. In other words, these fees comprise a part of wholesale fees you have to pay in order to take credit card payments.

There’s no avoiding the fact that the devil’s in the details when it comes to card brand fees, but too many merchants overlook or misunderstand them because the various card associations charge fees differently and sometimes even use different names for the same service. This is why we have compiled a list here to help you navigate these fees. We hope this article will help you decide which fees are justified, which are wrongfully charged to you, which can be disputed, and which are just markup fees in disguise that could be negotiated away with your processor.

Let’s take a closer look at card brand fees.

What Is A Card Association Fee?

First, let’s sync up on our understanding of what a credit card association is and the role it plays in credit card processing.

What Is A Credit Card Association?

A credit card association is a financial services organization that, among other things, makes the rules on how a specific brand of credit card (e.g. Visa cards) should work–rules like how to issue cards to consumers, how a merchant should take credit card payments, and how to prevent credit card fraud. Some of the associations, like Visa and Mastercard, license their brands to banks so that the banks can underwrite the cards, but others, like American Express and Discover, underwrite the cards themselves. They even market their own cards, to get more consumers to use them.

From the above, we can see that a credit card association is involved in some way in every credit card transaction. For their troubles, they charge the merchant a fee every time their card is used. These fees are collectively called the card association fee, the assessment fee, or the card brand fee.

Assessment Fee VS Interchange Fees

You’ve probably heard of another type of fee–the interchange fee–before coming across this article. Aren’t assessment fees and interchange fees the same thing? Many merchants are surprised to learn that interchange fees and card brand fees are two completely separate things.

The reason for this confusion is that both types of fees are considered part of the “wholesale” cost of card processing, as opposed to the “markup.” This means that assessment fees (and interchange fees) are both a part of your processor’s cost of doing business…which it has conveniently passed down for you to pay. The only difference between interchange fees and assessment fees is that interchange fees are paid to the card’s issuing bank, while the assessment fees are paid to the credit card associations.

If you’re interested in learning about interchange fees, check out our article on interchange fees and how the different pricing models (such as interchange-plus) incorporate them, and also see our complete guide to rates and fees.

As to card brand fees, they are typically either a percentage of volume charged or a flat amount per instance. Some apply to all your transactions, while others only apply in very specific situations, such as when an authorization is abnormal in some way. Yet others relate simply to sending card processing data through the card association’s computer network (i.e. FANF (Fixed Acquirer Network Fee, specific to Visa) and NABU (Network Access and Brand Usage fee, specific to Mastercard)). We’ll cover these individual fees and their circumstances in the itemized list later in this article.

Despite their complexity, the good news is that card brand fees have set, established amounts across the industry. Like interchange fees, they’re considered non-negotiable, and the processor has no control over the amounts. The bad news is that finding the true wholesale amounts for card brand fees is generally more difficult than looking up interchange rates.

Why Credit Card Association Fees Are A Pain For Merchants

Due to several regrettable quirks of the processing industry, card brand fees are particularly complicated and opaque. Here are the primary reasons:

• They’re not displayed on the card brand websites. By contrast, interchange tables are readily available at the Visa and Mastercard websites.
• You can’t call the card brands and ask about the fees. You’ll be redirected right back to your own merchant service provider (MSP) to answer any questions. It’s incredibly frustrating that we can’t rely on the card brands to disclose these base costs, and instead must rely on processors and MSPs to be honest when they pass the fees through.
• Multiple fees may apply to the same authorization or transaction. For example, transactions paid with a foreign-issued card incur separate international surcharges on top of the regular assessment that’s applied to all your transactions.
• The fees change (and usually increase) over time. And not all at once. While they’re rarely decreased, sometimes particular fees are eliminated and/or replaced with others. Occasionally, a completely new fee is instituted.
• Many of the fees are known by multiple names and abbreviations, and it’s often difficult to match the names on your own statement with any established names.
• Two or more fees may be combined into one on your statement, making them hard to identify and verify.
• The fees can be spread throughout multiple sections of your statement — not grouped all together or even labeled properly. Often, they are buried inside “interchange” or “authorization” sections.
• Brazen processors or MSPs may add their own markups to card brand fees without telling you. Or, they may invent fees and give them card-brand-sounding names.
• Most of the fees are small, so can be overlooked as inconsequential. They can still add up quite quickly, but the real issue at stake is the overall honesty and transparency of your provider. Regardless of whether an extra fee or markup here and there isn’t costing you that much, wouldn’t you still rather know about it?

How To Keep Track Of Assessment Fees Amid All The Other Credit Card Merchant Fees

There is no question that these assessment fees are difficult to keep track of. There is, unfortunately, no easy shortcut. We do, however, suggest the following tips for navigating these fees:

1. Be aware that you may be charged only some, or even none, of these fees. This depends on several factors, including 1) your pricing model, 2) what your MSP decides to pass through instead of absorbing, and 3) what happens with your transactions and authorizations in a given month. With many blended, tiered or flat-rate plans, all or most of the card brand fees are absorbed into the overall cost of your account instead of itemized and passed through to you. There are no guarantees with any pricing model, however, so check your statements anyway!
2. Obtain a list of card brand fees from your merchant account provider. If they’re passing these fees through to you, they should provide a detailed list with the specific names and abbreviations they’re using.
3. Use a secondary, neutral source to confirm fee amounts. Our list below is a great place to start.
4. Keep a running list of the card brand fees you’ve seen on your own statements, along with the amounts. Reference lists are handy, but a personalized list is easier to use and track over time than a litany of every possible fee for every possible circumstance.
5. Processors shouldn’t mark up these fees without clearly informing you. And really, they should leave these fees alone completely. If the fee is charged at all, it should be passed through at cost.
6. Trust the amount more than the name. Identifying a fee on your statement is often more about looking at the rate or amount charged, as well as the specific number/volume/type of transactions to which it was applied. The process of elimination can be very effective here.
7. Definitely be suspicious if you spot extra fees that aren’t on the reference list, any that seem like duplicates or that can’t be matched with established values, or those that look too high. Don’t worry too much if a fee seems too low; it’s possible your processor is just absorbing or redistributing some of the cost.
8. Be on the lookout for fee change notifications. October and April are common transition points, but the fees can change at any time. Good processors will notify you (sometimes on the statement itself) when a card brand fee is set to increase or change. If your processor doesn’t fall in this camp, it’s all the more important that you bookmark this article.
9. Ask before you sign. If you’re just now signing up for an MSP or changing providers, ask how it handles card brand fees in addition to interchange costs. Be very clear that you know the difference and want the specifics. Remember, not all customer service reps are created equal in their knowledge of this topic. Ask to be transferred up the chain if you’re not satisfied.

Reference List For Card Brands & Respective Assessments

Note that some of the lists we used as references to compile our list below contain more items. The card associations often like to break their charges by domestic vs. international in some way, so sometimes we leave out the international charge. Other times, our reference lists do not agree on the itemized name or amount, or some items appear on some lists but not others. When we can’t verify the item, we leave the item off the list.

We do believe that we have the big categories, however. At any rate, we intend to update this list often, so even if you don’t find an item on this list today, it might appear in the future.

Visa Network Fees

Volume-Based:

• 0.14% – Credit Assessment (Acquirer Service Fee)
  • Owed on gross monthly volume of Visa credit transactions.
• 0.13% – Debit Assessment (Acquirer Service Fee)
  • Owed on gross monthly volume of Visa debit transactions.
• 1.00% – International Service Assessment (ISA)
  • Surcharge owed on transactions that are processed in the US, in USD, and on a card issued outside the US.
• 1.40% – International Service Assessment (ISA) – Non-US currency
  • Similar fee as above, but incurs this higher rate when the transaction is settled in the cardholder’s local currency (i.e. not in USD).

Per-Item:

• $0.0195 – Acquirer Processing Fee (APF): Credit
  • Owed on all credit transactions for US-based businesses where the issuer or card holder is located in the US.
• $0.0155 – Acquirer Processing Fee (APF): Debit
  • Owed on all debit transactions for US-acquired businesses, where the issuer or card holder is located in the US.
• $0.0195 – Credit Voucher Fee (Credit)
  • Owed on all refunds issued in the US via credit card, where issuer or card holder is located in the US.
• $0.0155 – Credit Voucher Fee (Debit and Prepaid)
  • Owed on all refunds issued in the US via debit and prepaid card, where issuer or card holder is located in the US.
• $0.0018 – System File Transmission Fee / Base II Fee
  • Owed on all authorized transactions submitted for settlement (in addition to the above transaction fees). Base II refers to Visa’s settlement network.
  • Outdated Visa settlement fees:
    • $0.0025 – Settlement Network Access Fee. Base II fee may still be called by this name but should be $0.0018.
    • $0.0047 – Kilobyte (KB) Access Fee. Should not be charged in addition to the above.
• $0.10 – Transaction Integrity Fee (TIF)
  • Owed on a debit or prepaid Visa transaction that fails to meet CPS requirements (e.g., not settled in 24 hours, no AVS submitted on a keyed transaction).
• $0.09 – Misuse of Authorization Fee
  • Owed when a transaction is authorized, but not followed by a matching cleared transaction, or when a canceled or timed-out authorization is improperly reversed.
• $0.20 – Zero Floor Limit Fee
  • Owed when the merchant submits a settlement transaction without an authorization.
• $0.025 – Zero Dollar Verification Fee
  • Owed when the merchant verifies a cardholder’s information (e.g., AVS, CVC2) without authorizing a transaction.
• $1.00 – Dispute Image Fee
  • Owed when supporting documents or images for disputes are sent electronically to Visa

Other:

• Varies – Fixed Acquirer Network Fee (FANF)
  • A flat fee based on your volume per month, type of business (Merchant Category Code or MCC), number of locations, type of transaction (card present vs. card not present), etc. Typically charged quarterly or monthly.
• Varies – Dispute Related Charges
  • A flat fee ranging from $0.50-$1.65 for every disputed charge, whether or not you dispute the charge. The specific charge depends on whether the merchant challenges or accepts the dispute and whether the challenge or acceptance comes between 0-20 days, 21-25 days, 26-30 days, or 31 days. (Fees effective April 2020)

Mastercard Network Fees

Volume-Based:

• 0.13% – Assessment / Acquirer Brand Volume Fee 
  • Assessed to all sale transactions.
• 0.01% – Assessment / Acquirer Brand Volume Fee – Transactions >= $1,000)
  • Owed on gross commercial and consumer credit transactions exceeding $1,000; excludes signature debit. Note: May be listed as 0.01% surcharge over the above assessment.
• 0.0075% – Acquirer License Fee (ALF) / License Volume Fee 
  • Owed on gross transaction volume. Increased from 0.0045% Oct. 2017. Note: sometimes combined with the above assessments, bringing the totals to 0.1375% and 0.1475%, respectively.
• 0.60% – International / Cross-Border Assessment Fee (Domestic)
  • Surcharge owed by US-based merchants on transactions on a card issued outside the U.S. settled in USD. (Similar to Visa’s ISA.)
• 1.00% – International / Cross-Border Assessment Fee (Foreign)
  • Same fee as above, but incurs this higher rate when the transaction is settled in the cardholder’s local currency. (Similar to Visa’s ISA.)
• 0.01% – Digital Enablement Fee
  • Owed on all card-not-present transactions for signature debit, consumer credit, and commercial credit cards.
• 1.57% – Global Wholesale Travel Transaction B2B
  • Owed instead of regular assessments, international surcharges, and NABU fees when the Mastercard B2B (MSB) card product has been used. Applies to a specific set of Merchant Category Codes (MCCs) in the travel and entertainment sector.

Per-Item:

• $0.0195 – Network Access and Brand Usage Fee (NABU Fee)
  • Owed on all US-based authorizations, regardless if settled. (Similar to Visa’s APF, Discover’s Data Usage Fee.)
• $0.01 – AVS Fee (Card-Not-Present)
  • Owed on card-not-present transactions processed using Address Verification Service (AVS). Often shows up on a statement under “Authorizations.”
• $0.005 – AVS Fee (Card-Present)
  • Owed on Card-Present transactions processed using AVS. Often shows up under “Authorizations.”
• $0.025 – Account Status Inquiry Fee (Intrarregional)
  • Owed when a merchant verifies AVS or CVC2, where the merchant and cardholder are in the same region.
• $0.03 – Account Status Inquiry Fee (Interregional)
  • Owed when a merchant verifies AVS or CVC2, where the merchant and cardholder are not in the same region.
• $0.03 – SecureCode Transaction Fee
  • Owed on all MC 3-D Secure 1.0 (3DS1) verification attempts; fee is 0.01% if verification is for 3-D Secure 2.0 (3DS2)
• Processing Excellence Fee
  • Owed for transactions that do not comply with best practices for transactions (i.e., not properly cleared/settled/reversed within Mastercard’s time frames for the type of transaction). Below are similar fees for other types of authorization integrity issues:
    • $0.045 – Processing Excellence Fee, Pre-Authorization
    • $0.045 – Processing Excellence Fee, Undefined Authorization
    • $0.040 minimum, or 0.25% – Processing Excellence Fee: Final Authorization
    • $0.100 – Processing Excellence Fee, Excessive Authorizations
    • $0.045 – Processing Excellence Fee, Nominal Authorizations
• $0.012 – Processing Integrity Fee Detail Reporting
  • Owed on any authorization that generates a processing integrity fee for pre-authorization, undefined authorization, or final authorization.

Other:

• $1.25/mo./location ($15 per year) – Merchant Location Fee
  • $15 annually for each location with traditional MSPs/processors ($3 annually for payment facilitators like Square). Not applicable to merchants processing under $200/month, nor to charitable or religious organizations.
• $500 – Yearly Registration Fee
  • For online e-cigarettes/vaping businesses.
• $1.35 – Dispute Case Fee 
  • For each incoming dispute initiated by Mastercard or card issuer, with an additional $0.20 if supporting documents are electronically delivered to Mastercard

Discover Network Fees

Volume-Based:

• 0.13% – Assessment
  • Owed on gross transaction volume.
• 0.55% – International Processing Fee
  • Owed on US-based transactions processed with a card issued outside the U.S.
• 0.80% – International Service Fee
  • Applies in same circumstance as the International Processing Fee above.

Per-Item:

• $0.0195 – Data Usage Fee
  • Owed on all authorized transactions. (Similar to Visa’s APF and Mastercard’s NABU Fees.)
• $0.025 – Network Authorization Fee
  • Owed on all authorized transactions. Replaced the Data Transmission Fee in 2013, which only applied to settled transactions.

American Express OptBlue Network Fees

Volume-Based:

• 0.15% – Assessment
  • Owed on gross transaction volume.
• 0.40% – International Assessment / Inbound Fee
  • Surcharge owed on transactions involving a card issued outside the US.
• 0.30% – Card-Not-Present Surcharge
  • Surcharge owed on any transactions considered CNP, including keyed and eCommerce transactions.
• 0.75% – Technical Specification Non-Compliance
  • Owed on transactions that do not meet Amex standards, such as an authorization not obtained at the same time as a sale. Much rarer than Visa and Mastercard fees for transaction integrity problems.

Per-Item:

• None

So What Do I Do With All This Information About Assessment Fees?

If you take credit cards, then card association fees are a necessary evil. The idea that all costs of doing business can be passed downstream to your customers or clients is an antiquated one, but it lingers in the credit card industry probably because only a few entities at the top actually control these costs. When they hold a “take it or leave it” attitude and they’re the only ones providing the service, you’re pretty much stuck paying the fees.

Fortunately, the credit card processing world is changing, and new business models are being introduced. Some of these models will absorb some of these assessment fees instead of passing them all down to you. Despite this, if you process credit cards, you’re likely to have seen at least some of these fees in your monthly processing statements.

As stated earlier, these fees are difficult to verify because they change and they’re not often publicly disclosed. We readily admit that we may have missed or left out a few when compiling our list for this article.

As merchants, you are on the front lines for tracking card brand fees. We believe your input will be key in keeping our reference list up to date. Some of you have processors who actually do a good job organizing and displaying card brand fees on statements, as well as notifying you of any upcoming changes. Is a fee on our list is no longer accurate? Are we missing a new, legitimate fee? Together, we can also help other merchants whose processors are abysmal at communicating fees, or even cheating business owners. Let’s all team up on this–leave a comment below!