The Complete Guide to Card Brand Fees for Merchant Accounts

You signed up for a merchant account and see your processing statement for the first time and come across a convoluted chart of fees and figures that are beyond your comprehension.

You might be left scratching your head wondering what is all this, what is a card brand fee? Why don’t any of these figures make any sense? Some are listed as percentages others are described as flat fees.

Is this all mumbo jumbo, is this a scheme to rob you for every last penny that you have?

All these complicated and incomprehensible figures and acronyms that you are seeing have many names, some call them card brand fees, card network fees.

Others call them card assessment fees or card association fees. And they are legally correct and legitimate fees. The moral and ethical aspect of these fees is a separate debate.

These fees can be broken down into three categories incidental, transactional, and scheduled.

To put it into simple terms, these are the fees that you incur every time you swipe your credit card to for any kind of transaction.

They are service fees and they go directly to MasterCard, Visa, Discover, and America express depending on which credit card association the card belongs to. These fees are the charges that you have to pay in order to use their services.

Now the thing to note here is that the secret is always hidden in the fine print when it comes to these dubious-looking fees.

There is a general air of confusion and misconceptions within the merchant community when it comes to understanding these fees that are partly because every credit card association has a different perimeter and policy for charging these fees.

To clear up some of the misconceptions out there and to give you a better understanding of these fees, we have put together a list here. If you make it to the end, you will be able to better decide if these fees are just or if you are being wrongfully charged.

This article will give you a clear idea of what these fees are all about.

Let’s dig in!

Card Association Fees — Everything You Need to Know

Before getting into fees, let us get up to speed with the nitty-gritty of a credit card association and the part it plays in the processing of our credit card.

What Role Credit Card Association Play in a Credit Card Transaction?

A credit card association is an organization that provides financial services to its clientele. They set the rules and regulations for credit card brands (like Visa and Mastercard.)

The rules cover all the guidelines on:

  • How the cards will be issued to the consumers.
  • The payment methods to be used by the merchants for credit cards.
  • Ways to avoid credit card frauds.

There are two types of credit card associations. Brands like Mastercard Visa sell the license to the bank which allows banks to underwrite the credit cards issued to customers. Other associations, such as Discover and American Express issue cards that they underwrite themselves.

What is a Card Association Fee?

In one way or another, there is always a credit card association involved in every transaction made using a credit card. They charge a set fee for their services, every time a credit card transaction is made. The fee that the organization charges a merchant is called card association fee. It is also referred to as the card brand fee or the assessment fee.

Assessment Fee VS Interchange Fees

You might have come across another kind of fee. The interchange fees. It is a common misconception that interchange fees and assessment fees are the same things. The fact of the matter is that they are two completely separate types of fees.

The root of the confusion is that they are both believed to classified under the larger category of wholesale cost rather than the markup. Both of these fees are associated with the cost of doing business with your chosen processor.

The thing that sets these fees apart is that assessment fees are paid to the credit card associations and the interchange fees are paid to the card’s issuing bank.

When it comes to card brand fees, normally they are a percentage of the amount charged or in certain instances, they can be flat amounts. Some of these fees are applicable to all transactions that you make, and some are restricted to very specific situations.

Some fees are quite simply related to the cost of sending card processing data using the computer network of your chosen card association.

These fees may be hard to understand but there is some promising news, card brand fees are regulated to a set amount throughout the industry. They cannot be changed, and the processor has no authority over the amount of the fee.

The downside however is calculating the right wholesale amount when it comes to card brand fees is much more difficult than searching for what the interchange rates are.

Reference List for Card Brands & Respective Assessments

Some of the lists that you will see below contain additional items. The charges of card associations are often broken into international vs domestic in one manner or another, so in some instances, we skip the international charge. These lists also leave out the items that we can not verify independently.

This list will be updated in the future and the items left out might appear with the updates in the future.

Visa Network Fees

Volume-Based:

Fee Type Percentage Owed on
Credit Assessment or Acquirer Service Fee 0.14% Gross sum of transaction made per month using Visa credit card.
Debit Assessment or Acquirer Service Fee 0.13% Gross sum of transaction made per month using Visa debit card.
International Service Assessment or ISA 1.00% Transactions processed in the United States, in USD, on a Non-US credit card.
International Service Assessment or ISA on Non-US currency 1.40% Transactions processed in the United States, in any currency other than USD on a Non-US credit card.

Per-Item:

Fee Type Card Type Charges Owed on
Acquirer Processing Fee or APF Credit $0.0195 Transaction made for any US-based business given the card holder or the issuer is in the US.
Acquirer Processing Fee or APF Debit $0.0155 Transaction made for any US-acquired business given the card holder or the issuer is in the US.
Credit Voucher Fee Credit $0.0195 Refunds made in the United States given the cardholder or the issuer is in the US.
Credit Voucher Fee Debit or Prepaid $0.0155 Refunds made in the United States given the cardholder or the issuer is in the US.
Basel II Fee or System File Transmission Fee * All Visa Cards $0.0018 All transactions made using a Visa card. (It is charged besides above-mentioned transaction fees)
Transaction Integrity Fee or TIF Debit or Prepaid $0.10 Transaction that do not meet the requirements set by CPS
Misuse of Authorization Fee All Visa Cards $0.09 Transactions that do not adhere to the authorization procedure properly.
Zero Floor Limit Fee All Visa Cards $0.20 Submission of settlement transaction by the merchant without authorization.
Zero Dollar Verification Fee All Visa Cards $0.025 Cardholder’s information verification by the merchant without a successful transaction.
Dispute Image Fee $1.00 Electronically sending supporting images or documents for dispute.

*Basel II fee might be referred to as Settlement Network Access Fee, but it should be $0.0018. Also, if you are paying Basel II fee, you should not be charges Kilobyte (KB) Access Fee ($0.0047).

Other:

Fee Type Amount When is it charged?
Fixed Acquirer Network Fee or FANF Varies The flat fee is charged monthly or quarterly depending on the volume of transaction per month, the type of business, type of transaction, number of locations, etc.
Dispute Related Charges Varies ($0.50- $1.65) The flat fee is imposed for every disputed charge. How much you will be charged depends on whether the dispute is accepted or challenged by the merchant. It also depends on how long it took for acceptance or challenge to come.

Mastercard Network Fees

Volume-Based:

Fee Type Amount Owed on
Assessment / Acquirer Brand Volume Fee 0.13% All sale transactions
Assessment / Acquirer Brand Volume Fee (If the transaction is greater than or equal to $1000) 0.01% Gross sum of commercial as well as consumer transactions that exceed $1000. It does not include signature debit.
License Volume Fee or Acquirer License Fee (ALF) 0.0075 % Gross sum of transaction. Remember: Sometimes ALF is combined with Acquirer Brand Volume Fee making the charges 0.1375% or 0.1475% depending on the amount of transaction.
International / Cross-Border Assessment Fee (Domestic) 0.60% Transactions processed in the United States, in USD, on a Non-US credit card. (It is a surcharge owed by US-based merchants. )
International / Cross-Border Assessment Fee (Foreign) 1.00% Transactions processed in the United States, in any currency other than USD on a Non-US credit card.
Digital Enablement Fee 0.01% All transactions without card for consumer credit, signature debit as well as commercial credit cards.
Global Wholesale Travel Transaction B2B 1.57% The MSB (Mastercard B2B) card products. It is imposed in place of international surcharges, regular assessments and NABU fees. The fee is for a certain set of MCCs belonging to travel and entertainment sector.

Per-Item:

Network Access and Brand Usage Fee (NABU Fee)$0.02 All US-based authorizations. (Similar to Visa Card’s APF)
AVS Fee (Card-Not-Present)$0.01 Transactions made without a card using AVS (Address Verification Service)
AVS Fee (Card-Present)$0.01 Transactions made with card using AVS.
Account Status Inquiry Fee (Intra-regional)$0.03 AVS or CVC2 verification by the merchant if the cardholder and merchant are in the same region
Account Status Inquiry Fee (Inter-regional)$0.03 AVS or CVC2 verification by the merchant if the cardholder and merchant are not in the same region
SecureCode Transaction Fee$0.03 All the attempts made for 3DS1 verification.
SecureCode Transaction Fee$0.01 All the attempts made for 3DS2 verification.
Processing Excellence FeePre-Authorization – $0.045
Undefined Authorization – $0.045
Final Authorization – $0.040 minimum or 0.25%
Excessive Authorizations – $0.100
Nominal Authorizations – $0.45
Improper transaction which includes transactions that are not properly cleared or settled or reversed within time frames set by Mastercard for that particular type of transaction

Other:

Fee TypeAmountOwed For
Merchant Location Fee*$15 (annually)each location with traditional MSPs/processors. 
Yearly Registration Fee$500  online businesses of e-cigarettes and vaping.
Dispute Case Fee$1.35 initiation of each dispute by card issuer.  
Dispute Case Fee$0.20 Additional fee if the supporting documents are submitted electronically.

Discover Network Fees

Volume-Based:

Fee Type Amount Owed on
Assessment 0.013% Gross total of transaction
International Processing Fee 0.55% US-based transactions that are made with a card issued outside the United States.  
International Service Fee 0.80% US-based transactions that are made with a card issued outside the United States.  

Per-Item:

Fee Type Amount Owed on
Data Usage Fee $0.0195 all authorized transactions
Network Authorization Fee $0.025 all authorized transactions

American Express OptBlue Network Fees

Volume-Based:

Fee Type Amount Owed on
Assessment 0.015% gross transaction volume
International Assessment / Inbound Fee 0.40% transactions with a card that is issued outside the US
Card-Not-Present Surcharge 0.30% any transactions considered CNP
Technical Specification Non-Compliance 0.75% All transactions that fail to meet Amex standards.

Per-Item:

  • None

So What Do I Do With All This Information About Assessment Fees?

You have to pay the devil it’s due. Card association fees go hand in hand with credit cards themselves. The notion that the customer has to pay for all costs of doing business is a debatable one but it is a part of the credit card industry. The reason for this is that the control is divided between a very small number of corporations. There is a lack of alternatives so the companies that control this industry have a take it or leave it attitude towards the customers. Sadly, there is no way around these fees.

But there is still hope. Progress is being made in this regard, and new business models are starting to gather some traction. A few of the newer models aim to reduce these fees and even abolish some fees altogether. But still, when your monthly statement arrives, there will be some sort of assessment fee involved.

As mentioned in the article these fees are very tricky to verify. They are rarely publicly declared and always keep changing.

Merchants are on the front lines in this battle against card brand fees. Your input is the most valuable and helpful in this fight. If you have anything to share feel free to let us know. We can only win this war by teaming up and demanding change. Leave a comment down below to let us know your thoughts.

Matt Williams is the founder and CEO of Add USA Story - A platform for global startup, looking to find happiness in the world of startups, investments, health, technology, business and more.

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