Visa to launch new fixed fee per merchant account

Visa announced a new fixed fee for merchant acquirers that will surely be passed on to merchants. “The fixed fee for merchant acquirers is expected to be $2 per month for about 60% of merchants and $5 or less per month for about 80% of merchants, Visa” said Friday. Visa said it also is waiving the fixed fee for acquirers that work with “qualifying charitable organizations.”

Visa Inc.’s new Fixed Acquirer Network Fee (FANF) is targeted at boosting profits after the Dodd-Frank Act, particularly the Durbin Amendment, changed debit fees and network rules, impacting Visa’s revenues.

  • Interchange, is collected by acquirers and paid to card issuers.
  • Visa’s FANF and Acquirer Processing Fee (APF) are fees that Visa charges acquirers and books as its own revenue.

Although there is no official release as to the final numbers, here is some data that is circulating:

Retail or Card-present merchants, excluding fast-food restaurants:

  • 1-3  locations $2 per location, per month FANF
  • 4 + locations up to to $65 per location for merchants with more than 4,000 locations.
  • 1-3  locations high-volume will pay $2.90 per location per month; possibly more than $85 per location for merchants with more than 4,000 locations.

 Card-not-present merchants, merchant aggregators, and fast-food restaurants:

  • $2 per merchant account per month for sales of $50 or less up to $40,000 per month for merchants with more than $400 million in gross sales. The monthly fee will be assessed based on Visa volume.
  •  Possibly 16 tiers of fees.

The fee goes into effect beginning April 1, 2012 and merchants who are on ‘pass through’ pricing can expect to see the new fee on their statements as a separate line item, reflecting whatever fee is applicable to their account type, beginning in July 2012.

The Visa Acquirer Processing Fee (APF) will be reduced from 1.95 cents per debit authorization to 1.55 cents, as per the July 2011 announcement coinciding with new debit rules.

See Also Wall Street Journal article:  UPDATE: Merchants Face Cost Changes As Visa, MasterCard Unveil New Fees