The fee basically acts as a penalty for submitting a transaction for settlement without first submitting it for proper authorization. As of 2022, Visa sets the zero floor limit fee at $0.20.
Visa Assessment Fees
If the term “assessment fees” is new to you, check out our in-depth guide to credit card processing for a full understanding of the fees involved in processing. The quick version is that credit card companies collect assessment fees as their piece of the pie. Visa sets rules for when fees apply and the costs associated with the fee. The company charges multiple assessment fees, sometimes on the same transaction. Visa charges assessments either as a percentage of the total transaction or as a cents-based fee. Fortunately, many assessment fees are small – often pennies or less. However, the Zero Floor Limit fee is not one of them. It’s one of the higher cents-based fees that Visa charges.The Zero Floor Limit Fee
While many cents-based assessments are pennies or even fractions of a penny, the Zero Floor Limit Fee is a full 20 cents. It will apply to settlement transactions that were not properly authorized and thus can’t be matched to an authorization. It acts as a sort of penalty fee. The Zero Floor Limit Fee can apply in addition to other assessments. Many processors pass the fee to you at cost, but some may mark it up.Finding the Fee on Your Statement
Since the fee only applies if you don’t properly submit transactions for authorization, you may not ever see the Zero Floor Limit Fee. However, if your transactions can’t be matched to a previous authorization, you’ll end up paying this fee. Note that in some cases, you could pay the fee without actually seeing it on your processing statement. This is true of situations where processors group together multiple assessment fees. Additionally, if you’re on a flat rate pricing model (that is, if you have an account with a company like Square or Stripe) you won’t see any individual assessments on your statement. However, just because you don’t see the fees listed individually doesn’t mean you aren’t paying them.Interchange Plus and Tiered Pricing
Most of the time, if you’re on an interchange plus or tiered pricing model, you’ll be able to see individual assessment charges. Different processors may refer to the fees by variations of the name, but you can usually figure out to which charge they’re referring. Be sure to look for variations or abbreviations of the fee you’re seeking. Note to CardFellow clients: As part of our service, we provide free statement audits to ensure that assessments are passed to you at cost and that your fees are optimal. If we see a lot of avoidable assessments, we’ll work with you to reduce or eliminate them so that you pay the lowest possible costs for processing. If you haven’t had an audit done lately, give us a call to set one up.Lowering Visa Costs at Your Business
Many businesses overpay for credit card processing, but focusing on assessments isn’t usually the way to fix it. However, since the Zero Floor Limit Fee is a penalty fee in a sense, you can lower costs by reducing or eliminating instances that you’re charged that fee. Be sure to follow proper procedures for authorizations and settlement. That will reduce the chances of getting hit with a Zero Floor Limit Fee. That said, even if you eliminate all of your Zero Floor Limit Fees, it probably won’t put a big dent in your costs. If you’re looking for bigger savings, you’ll need to focus on securing the lowest processor markup. Tools like CardFellow’s free quote comparison system allow you to quickly and easily compare real pricing from multiple processors so that you can find the right fit and lowest pricing for your specific business. It’s free, it’s private, and it’s fast. Give it a try at cardfellow.com!
Ben Dwyer began his career in the processing industry in 2003 on the sales floor for a Connecticut‐based processor. As he learned more about the inner‐workings of the industry, rampant unethical practices, and lack of assistance available to businesses, he cut ties with his employer and started a blog where he could post accurate information about credit card processing. As the blog gained in popularity, Ben began directly assisting merchants in their search for a processor. Ben believes in empowering businesses by providing access to fair, competitive pricing, accurate information, and continued support. His dedication to transparency and education has made CardFellow a staunch small business advocate in the credit card processing industry.
