All businesses must accept credit cards today if they want to stay competitive, but that doesn’t mean you should overpay in fees. There are certain fees everyone pays no matter which credit card processor they use, but there are also other fees that may be negotiable or avoided altogether.
Once such non-negotiable fee is the fixed acquirer network fee – there is no profit in this fee and it’s a required fee every merchant pays.
What is the FANF Fee?
The fixed acquirer network fee was put into place when the Durbin Amendment began. The amendment took away some of the network’s profits, so in its place, they made the FANF fee. Visa started charging this fee in 2012, and it applies to all credit and debit card transactions.
What will you Pay?
The Visa FANF fee varies by merchant. The number of card-present and card-not-present transactions you do each month determines the cost. It also depends on how many locations your business has and your overall total business volume.
Visa classifies businesses as:
- Regular business with card-present transactions
- High-volume business with card-present transactions
- Regular business with card-not present transactions
Rates are lowest for regular businesses with card-present transactions and the highest for businesses with card-not present transactions.
Visa calculates the fee monthly, but you pay it quarterly.
Are There Exceptions to the FANF?
While it’s a standard fee that most merchants pay, there are a few exceptions to the rule:
- If your total monthly sales are less than $200 you don’t pay it
- If more than half of your Visa sales are charitable sales
Will Fees go Up?
Just when you get the hang of the FANF fee, you may find it increases. This usually happens for one of the following reasons:
- You opened another location
- You had more sales
- You had more card-not present transactions
Is it Legit?
Whether the fixed acquired network fee is legit is up for debate. Some call it a junk fee and others call it greedy. It used to be the Network Participation Fee but after the Durbin Amendment, that fee was eliminated and the networks stood to lose a lot of money. This isn’t a fee your credit card processor charges or that you or them can change – it’s a part of doing business.
There’s little you can do to lower your Visa FANF fees, except avoid card-not present transactions whenever possible. It’s a good idea to avoid those transactions anyway since they’re more expensive to process and a much higher risk.
If you minimize the other costs you pay for credit card processing by using a quality credit card processor with transparent pricing, the FANF fee won’t affect your bottom line as much as many merchants make it out to be. Do your homework and you’ll make the most of your credit card processing too.
Lou Honick is the CEO of Host Merchant Services. Prior to founding Host Merchant Services in 2010, Lou was the founder of HostMySite.com and received numerous awards including SBA Young Entrepreneur of the Year, Inc Magazine 30 under 30, and multiple listings on the Inc 500. As a serial entrepreneur, all of his companies have operated on a singular devotion to outstanding customer service and support. Lou is a respected expert on the topics of customer service, payments and fintech, Internet technology, and entrepreneurship.