MasterCard adds a Network Access and Brand Usage Fee
Effective April 17, 2009, MasterCard will assess a Network Access and Brand Usage Fee (NABU) of $.0185 for all U.S. issued transactions settled with MasterCard.
These costs are certain to be passed along to all merchants. All merchant agreements include language to pass along costs to merchants from Visa, MasterCard, and more recently, Discover.
Merchants will likely see these costs in their June statements. If you are on “pass through interchange” pricing, the costs will be a line item, without mark up. If you are any other type of price plan, the costs may be hidden within other costs, or they may be a separate line item, depending on your overall price plan. The costs may be passed through as is, or part of a broader cost increase for your fees.
The MasterCard NABU fee comes at the same time of annual Visa and MasterCard interchange updates, and therefore will be included with other fee changes customers will experience in their May or June merchant statements.
Tags: mastercard, merchant rates
April 2nd, 2009 at 7:32 pm
Doed this replace the 0.0925% assessment fee or is it on top of this?
April 2nd, 2009 at 10:22 pm
This is on top of that.
May 26th, 2009 at 7:37 pm
[...] of where the issuer/cardholder is located. This fee will be effective July 1, 2009. This follows a MasterCard Network Access and Brand Usage Fee (NABU) of $.0185 for all U.S. issued transactions settled with MasterCard, announced in April [...]
June 2nd, 2009 at 5:45 pm
I can’t find the announcement about the NABU fee anywhere on the MC websites - that seems strange. Do you know where I can find this? It does not appear to be on their Interchange Rates document for April, 2009 either…?
June 2nd, 2009 at 6:44 pm
It’s a great question Amber. It’s not an interchange fee.
Interchange fees can be managed and vary by card presented plus many other factors.
The network fee cannot be managed or avoided. Different processors may have different hard costs. These costs are not published for the world to see.
Per MasterCard, interchange rates are posted for merchants to see so that they can negotiate deals. If that’s the case shouldn’t a hard cost that applies to every transaction for every processor be posted too?
The .0925% MasterCard dues and assessments fee does not appear on the interchange document either. Now the new fee is .0925% of dollar volume plus $.0185 per item. A “pass through cost plus” agreement should itemize specific fees that do not appear on the interchange document. All agreements include a clause to pass on Visa & Mastercard Association price changes.
I actually looked to see if the fee would appear in some investor relations material before writing this article, but I didn’t find a specific reference.
June 19th, 2009 at 7:37 pm
Thanks for checking on this. Yes, I think that hard costs that apply to every transaction should be listed somewhere besides the processor’s documents. When you get a notice that says Visa or MC has “announced” new fees…it raises an eyebrow when you can’t find the announcement!
Thanks again!
June 28th, 2009 at 11:06 pm
Does this apply to Mastercard debit cards used as a pin transaction, that go over the Maestro network?