Effective April 1, 2012, Visa began charging a Fixed Acquirer Network Fee (FANF), previously called the Network Participation Fee (NPF). The FANF is a monthly fee that will affect all businesses to a varying degree.
The Fixed Acquirer Network Fee, often abbreviated as FANF, is an assessment fee that Visa charges for credit card acceptance. The fee went into effect in 2012, but has undergone several changes since then.
Unlike some other assessment fees, the FANF is not a set cost. It varies based on factors including processing method, sales volume, and number of business locations.
- Fixed Acquirer Network Fee (FANF)
- Changes Over Time
- Identifying the FANF on Statements
- Lowering Costs
Fixed Acquirer Network Fee (FANF)
Effective April 1, 2012, Visa began charging a Fixed Acquirer Network Fee (FANF), which Visa previously called the Network Participation Fee (NPF). The FANF is a monthly fee that will affect all businesses to varying degrees.
For card present businesses like retailers, the amount of the Fixed Acquirer Network Fee will be based on the number of locations a business has. For card not present businesses like e-commerce operations, the FANF will be based on gross Visa processing volume.
Processors calculate FANF monthly but will charge you quarterly for the previous calendar period. For example, the first collection for the first quarter of 2012 will be in July 2012. As an assessment fee, the FANF is non-negotiable and remitted to Visa.
The Fixed Acquirer Network Fee is a bit complicated because the amount of the fee varies depending on the following variables.
- Merchant Category Code (MCC)
The merchant category code used to classify a business plays a role in the amount of the FANF charged each month. However, the impact of the MCC is very minimal, amounting to a difference of $0.90 – $1.10 for most businesses (less than fifty locations).
- Acceptance Method
The main factor in determining the amount of the FANF is whether a business processes the majority of its transactions in a card present or card not present environment.
- Card Present Businesses (Excluding Fast Food Restaurants / MCC 5814)
The amount of the Fixed Acquirer Network Fee for card present businesses will be based number of locations. Businesses with one location will be charged $2 – $2.90 a month, up to $85 a month for businesses with 4,000 or more locations.
- Card-Not-Present Businesses (As well as Fast Food Restaurants / MCC 5814)
For card-not-present businesses, the amount of the FANF will be based on gross Visa processing volume. Card-not-present businesses will see a greater impact from the FANF than card-present businesses due to the fee being determined by volume.
For example, card-not-present business processing between $8,000 and $39,999 will be hit with a Fixed Acquirer Network Fee of $15 a month opposed to just $2 for a card present business with similar volume and one location.
It’s also worth noting that if a business accepts cards in both card-present and card-not-present methods, FANF fees apply to each method.
Visa will waive the FANF for charitable organizations classified under merchant category code 8398. Exactly how the fee will be waived isn’t quite clear, but indications are that Visa will charge the FANF and then provide a rebate at a later date.
Changes Over Time
In April 2015, Visa announced several updates to the fixed acquirer network fee that makes it even less “fixed” than before. The main highlights of the changes are:
- The FANF will not apply to Taxpayer ID numbers in months when sales are less than $200.
- The FANF charge will be calculated at 0.15% of gross sales in months when sales volume is $200-$1,249.99.
In May of 2012, the antitrust division of the U.S. Justice Department has taken notice of Visa’s new FANF. Read more about the Justice Department probe here.
Identifying the FANF on Statements
Businesses that are charged on an interchange plus or tiered pricing model may be able to locate the FANF along with other Visa fees on a processing statement. (Note, businesses that utilize a “flat rate” processing company will not see individual assessment fees listed on their statements.)
In the examples below, you can see the different names that a processor uses to refer to the fee.
In the first example, it’s called the Fixed Network CNP Fee, referring to FANF for card not present (CNP) businesses.
The second statement shows both card present and card not present fees (listed as the full name Visa Fixed Acquirer Network Fee), indicating that this business accepts cards in both methods.
The third statement lists the Visa Network Fee and notes it’s card-present, while the fourth simply lists Visa FANF Fee. However, from the amount ($2.00) we can assume that it was charged to a card-present business with one location.
In many cases, processors will simply pass the FANF cost to you without adding a markup. However, it’s important to remember that processors could add a markup if they chose. If you’re a CardFellow client, we require processors to pass assessments to you at cost, and we conduct statement audits to ensure you’re billed correctly.
As an assessment fee, you can’t negotiate the FANF. Processors will need to charge at least the amount that Visa sets so that they don’t lose money. If you’re looking to save money on your processing fees, you’ll need to focus on the processor’s markup.
In order to do that, you’ll need to know the fees that the processor charges in excess of the fees set by Visa/Mastercard and the banks that issue credit cards to consumers.
Fortunately, there are tools you can use to make the comparison process easier. CardFellow offers a free, no-obligation pricing tool. You’ll be able to see a full cost breakdown from multiple processors in our marketplace. You can also invite a quote from any processor you’d like and see how it stacks up. Our software puts quotes in the same format for you, allowing an apples-to-apples comparison.
Additionally, if you have questions or need further assistance when comparing pricing, you can contact the independent experts at CardFellow to get real answers from unbiased experts. Try it now!