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.

5 thoughts on “MasterCard adds a Network Access and Brand Usage Fee

  1. 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.

  2. 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!

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