new Visa credit card processing fees 2009

Visa recently announced several new fees impacting merchant credit card processing costs. Merchants working with us will get these announcements on their statements, in addition to any other contacts, and all costs will be passed through.

Visa Acquires Processing Fee (APF) Visa is rolling out a fee of $0.0195 on all Visa branded authorizations acquired in the US regardless 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 2009.

Visa Zero Floor Limit Fee – (clearing without authorization) This fee is applied for any clearing transaction submitted that cannot be matched to previously approved or partially-approved authorization transactions. The new fee will be $0.10 and is effective July 1, 2009.

Visa Misuse of Authorization Fee (authorization without clearing). Beginning July, 2009, Visa will apply the announced fee of $0.045 to authorizations that are not followed by a matching clearing transaction (or in the case of a cancelled or timed out authorization, not properly reversed).

International Service Assessment Fee Effective April 4, 2009 Visa implemented the International Service Assessment (ISA) fee of 0.40% (40 basis points) on all international (non U.S. card) transactions processed by a U.S. merchant. This fee is similar to MasterCard’s existing U.S. Cross Border Assessment Fee which is 0.30%.

Editors comments: these fees are not on the general interchange schedule that most people look at, however, the clever naming does not change the fact that these are costs that will be passed on to the merchants. If you have a small average ticket, a couple of pennies could increase your effective rate about .20%. If you have a lot of dollar transactions that are not reversed, such as when setting up a free online trial account, then the $.045 could also become quite costly. Your software program may not have a solution to cancel the authorizations, but hopefully this is being addressed by the major software providers.

3D Merchant Services Powered by CenPOS
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6 thoughts on “new Visa credit card processing fees 2009

  1. Is there a Visa bulletin on the above fees?

    Answer: I don’t know of a public link to such a bulletin. These fees were sent to merchant service providers via the standard bulletin process in which we receive fraud, rate, regulation and other alert information. I don’t know why they are not posted on the Visa web site. It is apparent through my time in this industry that the associations limit some information that they post online and leave it up to merchant processors to disseminate. The merchant processor has the relationship with the merchant and thus is in a better position to distribute information in a timely manner. Additionally, fees such as listed above may never appear on some merchant statements, because they don’t have a pricing plan that breaks down all their costs. Those merchants have bundled price plans with a higher profit margin for the processor so they can simply absorb fees if they choose to do so.

    Is the Visa Misuse of Authorization Fee a PCI Compliance fee? I don’t have inside information to adequately answer this question. My personal opinion is this would be related to tying up someone’s credit, not data security. A properly done authorization will result in an electronic authorization number and no card data storage. The merchant then performs a capture at the appropriate time using the prior authorization number so this would not be a data security issue.

  2. My processor tried to tell me that the Visa Misuse of Authorization Fee only applied if you attempted to capture an authorization over 10 days old. This is not how the text reads, and after 10 minutes of trying to explain it, the rep put me on hold for 10 minutes and came back and told me I was correct.

    Suppose you approve a transaction on a backordered item, and won’t collect until you ship. Suppose that’s a month later. You just lost 5 cents because you need a new approval code. Or suppose, the freight is less and the approval is a day old, and you don’t want to rip off your customer. You can’t capture on the original approval because it isn’t the correct amount (they charge you more for capturing if the amount approved doesn’t equal the amount captured), and now you can’t get a new approval or you lose 5 cents because you didn’t use the old approval.

    They get you coming and going. I’d rather be dealing with loan sharks. They’re more honest.

  3. Do these new fees apply to debit cards also? I’m thinking they do since the fee descriptions are saying “transactions” but can you confirm?

    Tom Mahoney

  4. We noticed on page 2 of our merchant billing statement that the processing rate increased from .25 to .45 per sales amount. Is this due to the Visa Misuse of Authorization Fee? If so what are the guidelines for maintaining the lower rate? Also, we noticed on the statement there is a note under the “News for You” section. It states “Visa Authorization initiative effective July 2009. Network asscess fee of $0.005ea is replaced by acquirer processing fee of $0.195ea, Auth/No Settle $0.045ea, Zero floor limit (No Auth) $0.10ea, Account verify is $0.025ea. Credit card rates +0.20%” What, in laymen’s language does this mean? Could this have something to do with the increase from .25-.45? We just don’t want to be guessing or speculating.

  5. “processing rate increased from .25 to .45 per sales amount. Is this due to the Visa Misuse of Authorization Fee? “. No. The misuse fee is $ 0.045 per transaction. It is pennies, not a percentage. The misuse of auth fee only applies under the guidelines described in the above article- not for every transaction.

    Regarding your other list of fees. They are just that- a list. So they don’t all add up to + .20%. Credit card rates +0.20% means your rates just went up 20 basis points, in addition to all the new fees you mentioned.

    Network access fee of $0.005ea is replaced by acquirer processing fee of $0.195 each. This is a new fee and everyone pays. No way to avoid this one.

    Auth/No Settle $0.045ea- this is the Visa Misuse of Authorization Fee explained above, applies if you have transactions that don’t clear. For example if you have a web store and you do an auth only, then capture later, but you don’t have product to ship, so you never capture. That’s a misuse of auth. You can avoid this by voiding transactions as soon as you know you are never going to capture the funds.

    Account verify is $0.025ea- it’s unclear what this is for. It might be an address verification fee (AVS), but you’ll have to ask.

    Zero floor limit (No Auth) $0.10ea- this is also explained above. I don’t know what system will allow you to capture funds without getting an auth, but apparently it’s possible and this fee will apply when that happens. I expect it will have no impact on most businesses.

    Again, if you don’t see the individual fees on your statement, it doesn’t mean you are not paying them. It just means your processor has bundled the fees into a lump line item. In those cases, you’re more likely to see your rates go up much higher on average.

    Kehw got a .20% rate increase on top of the new fees. This is not uncommon with bundeled price plans. The processor uses the timing of one rate increase to increase rates overall.

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