Mastercard Dues and Assessments and Cross Border Fees update

Merchant statements for April 2012 may include a bulletin about fees. This is a bulletin from an actual statement.

EFFECTIVE WITH MAY 1, 2012, YOU WILL BE CHARGED DUES AND ASSESSMENT FEES WHICH SHALL BE CALCULATED AS FOLLOWS: 0.110% (MASTERCARD) APPLIED TO ALL SETTLED MASTERCARD CONSUMER AND COMMERCIAL CARD SALES BELOW $1,000 AS WELL AS PREPAID AND SIGNATURE DEBIT CARD SALES REGARDLESS OF THE TRANSACTION AMOUNT, 0.13% (MASTERCARD) APPLIED TO CONSUMER CREDIT AND COMMERCIAL CARD TRANSACTIONS EQUAL TO OR GREATER THAN $1,000, 0.110% (VISA) AND 0.105% (DISCOVER) MULTIPLIED BY YOUR GROSS SALES VOLUME. CONTINUING YOUR MERCHANT ACCOUNT WITH US OR USE OF YOUR MERCHANT ACCOUNT AFTER 30 DAYS WILL REPRESENT YOUR ACCEPTANCE TO THESE TERMS.

EFFECTIVE JUNE 1, 2012, YOUR MASTERCARD “US CROSS BORDER FEE” WILL BE INCREASED TO .40%.

EFFECTIVE JUNE 1, 2012, A .80% MASTERCARD “US CROSS BORDER FEE” WILL BE ADDED TO YOUR ACCOUNT. THIS FEE WILL BE APPLIED TO TRANSACTIONS IN WHICH THE CARD PRESENTED WAS ISSUED IN A COUNTRY OTHER THAN THE UNITED STATES.

All of the fees above are mandatory and non-negotiable. Merchants see these fees on their statements if they are on PASS THROUGH or INTERCHANGE PLUS pricing. We call this ‘wholesale’ pricing. This is the best price plan for merchants because costs are transparent. If the merchant does not have these fees itemized, then they are on a bundled price plan. The downside is that higher profits can be hidden in bundled pricing.

Note, cross border fees are fairly new, yet they are climbing rapidly. Some merchants are under the misconception that these fees do not apply to them with their particular merchant processor, however, if you read the fine print, you’ll find them everywhere. For example, Paypal charges a 1% cross border fee. Why the difference? Because it’s Paypal cross border, not card association specific ie Discover, Visa, MasterCard which each have their own rates. Paypal is a bundled price program. They can charge whatever they want.