When you pick up your merchant services or credit card processing statement, you have probably seen pesky fees appear under a variety of labels. In most cases, these cryptic fees are labelled NABU (Network Access and Brand Usage Fees).
NABU fees are also known as card brand fees and are paid directly to Visa, Mastercard, American Express and Discover. It’s important to note that although your credit card processor may collect the fee, it doesn’t mean they directly benefit. In most cases, the fee is passed in its entirety to the card brand.
Why Pay Card Brand Fees?
Look, we get it… you have enough overhead to deal with. Who wants to pay extra fees?
Here’s the thing: card brand fees are a necessary evil for merchants who want to offer a variety of payment options to customers. The fees go towards ensuring the credit card company can continue serving merchants. Think of it as a small cost for the opportunity to accept their form of payment.
Let’s face it, most customers carry multiple credit cards and they expect to be able to use any card in their wallet. If you fail to accept common forms of payment, you’re giving your competitors an advantage over you.
How much am I paying in Card Brand Fees?
You pay interchange fees or card brand fees every time a cardholder makes a payment with their credit card. The amount paid in fees can vary by industry, transaction risk level, bank, card issuer and your payment processor.
Fees are typically used to cover these costs:
Credit and Debit Assessments
These fees can’t be avoided no matter which card issuer you choose. They are applied to gross credit and debit transaction volume and are paid directly to the card association (Visa or Mastercard).
| International Processing Fee: If a customer makes a purchase using a card originating from outside the US, you will be subject to an international processing fee. You may or may not see the international fee on your statement depending on your pricing model. |
| Processing Integrity Fee: If a transaction doesn’t go through within a specific period of time, you may be subject to what’s called a processing integrity fee. Typically, the time window is 24 hours for “card present” transactions and 72 hours for “card not present” sales. |
| Card-Not-Present Surcharge: These are fees you might typically see in e-commerce or mail-order transactions when the card is not physically present. Because these are considered riskier transactions, the fee is slightly higher than “card present” transactions. |
| Account Status Inquiry Fee: This is a fee that is imposed when you verify cardholder information without actually charging the card. |
Can I Reduce Card Brand Fees?
Card brand fees are set by the credit card issuer. Unfortunately, these fees are not up for negotiation. Instead, we advise our clients to enforce best practices that can reduce costly penalties and fines.
Need Expert Help to Manage Your Fees?
We can help you gain control over your fees so that you don’t pay more than necessary.
If you are a foundation or nonprofit, ask us about our special offers for payment processing fees.
Visa Assessments
| Visa Fee: Pass-Through cost. |
| Credit Assessments: 0.14% of credit card volume and $0.0195/transaction. For a $100 credit sale, Visa takes about 16 cents. |
| Debit Assessments: 0.13% of debit card volume and $0.0155/transaction. For a $20 debit sale, Visa takes about 4.2 cents. |
| FANF: Fixed Acquirer Network Fee – Visa charges this flat fee based on how much volume you process per month. Online merchants and brick & mortar merchants have differing FANFs due to the difference in the risk of chargebacks. |
| International Service Assessment Fee (ISA): Any card you accept as a US-based merchant, in USD currency, from outside the US will be subject to a 0.80% international surcharge from Visa.International Acquirer FeeThis fee applies under nearly identical circumstances as above – there is an additional 0.45% surcharge from Visa for non-US issued cards that are processed in the US. |
| Transaction Integrity Fee (TIF): This $0.10/transaction fee is assessed when a settled debit/prepaid card doesn’t meet CPS requirements – such as submitting AVS info on keyed sales and settling every 24 hours. |
| Zero Floor Limit Fee: This $0.20/transaction fee is assessed when a settled transaction can’t be linked to a proper authorization.Zero Dollar Verification FeeThis rarely applied fee of $0.025/transaction applies when cardholder information (AVS, CCV) is verified without authorizing the sale. |
| Misuse of Authorization Fee: This $0.09/transaction fee applies to all authorized transactions that do not have a matching settled sale. |
| Base II System File Fee: This $0.0018/transaction fee is charged for each authorized transaction submitted for settlement. |
MasterCard Assessments
| MasterCard Fee: Pass-Through cost. |
| Credit/Debit Assessments: 0.1275% of card volume and $0.0195/transaction for sales under $1,000. For a $100 sale, MasterCard takes about 15 cents. |
| Credit/Debit Assessments: 0.1475% of card volume and $0.0195/transaction for sales over $1,000. For a $2,000 sale, MasterCard takes about $2.97. |
| Digital Enablement Fee: This fee is 0.01% of volume, and applies on Card-Not-Present sales for commercial cards, consumer credit cards, and signature debit cards. |
| Cross Border Assessment Fee (Domestic): Any card you accept from outside the US will be subject to a 0.60% international surcharge from MasterCard. |
| Cross Border Assessment Fee (Non USD): Any card you accept from outside the US that is settled in non-US dollars will be subject to a 1.00% international surcharge from MasterCard. |
| Annual Location Fee: This $15 fee is assessed to all merchants on a per-location basis and is billed monthly at $1.25/month. This fee does not apply to merchants processing under $200/month, and does not apply to charitable/religious organizations (MCC 8398 and 8661). |
| AVS Fee (Card-Present): MasterCard assesses a $0.005/transaction fee for using Address Verification Services in a Card-Present environment. |
| AVS Fee (Card-Not-Present): MasterCard assesses a $0.01/transaction fee for using Address Verification Services in a Card-Not-Present environment. |
| Card Validation Code Fee: There is a $0.0025/transaction fee for all transactions that are submitted with the Card Validation Code (also known as Card Code Verification or CCV). |
| Pre-Authorization Integrity Fee: $0.045/transaction fee applies to pre-authorizations that are not fully reversed or cleared within 30 calendar days of the authorization date. |
| Undefined Authorization Integrity Fee: $0.045/transaction fee applies to undefined authorizations that are not fully reversed or cleared within 7 calendar days of the authorization date. |
| Final Authorization Integrity Fee: 0.25% volume fee ($0.04 minimum) applies to final authorizations that are not fully reversed or cleared within 7 calendar days of the authorization date or when the final authorization amount does not equal the clearing amount or when the final authorization currency code does not match the clearing currency code. |
| Processing Integrity Fee: This $0.055/transaction fee is charged when transactions are not settled within 24 hours for Card-Present sales, or 72 hours for Card-Not-Present sales. |
| Processing Integrity Fee Detail Reporting: This $0.012/transaction fee applies to any authorization that generates a processing integrity fee for pre authorizations, final authorizations or undefined authorizations. |
| Account Status Inquiry Fee: This rarely applied fee of $0.025/transaction applies when cardholder information (AVS, CCV) is verified without authorizing the sale. |
Discover Assessments
| Discover Fee: Pass-Through cost. |
| Credit/Debit Assessments: 0.13% of card volume and $0.0195/transaction for all sales. For a $100 sale, Discover takes about 15 cents. |
| International Processing Fee: This 0.55% fee applies to any cards that settle in dollars that differ from the home country, so it’ll apply just like the International Processing Fee whenever you run an international sale. |
| International Service Fee: Any card you accept from outside the US will be subject to a 0.80% international surcharge from Discover. |
| Network Authorization Fee: This $0.025/transaction fee is charged for each authorized transaction submitted for settlement. |
American Express Assessments
| AMEX Fee: Pass-Through cost. |
| Credit/Debit Assessments: 0.15% of card volume is paid directly to American Express. On a $100 sale, this works out to 15 cents. |
| Card-Not-Present Surcharge: American Express will charge 0.30% of all Card-Not-Present volume. |
| International Assessment: This 0.40% fee applies to any cards you accept from outside the US. |
| Noncompliance Fee: American Express will charge 0.75% of the sales volume when the sale does not settle within 7 days of authorization. This fee may also apply when calling for a voice authorization on a sale. If applied, this fee will be removed from one of your next few deposits. |
