Fixed Acquirer Network Fee (FANF) Visa
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.
Update May 4, 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.
Effective April 1, 2012, Visa began charging a Fixed Acquirer Network Fee (FANF), which was previously communicated as the Network Participation Fee (NPF). The FANF is a monthly fee that will affect all merchants to a varying degree.
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.
- Effective April 1, 2012
The implementation of the FANF will take effect on April 1, 2012.
- Previously called Network Participation Fee (NPF)
The FANF was previously communicated by Visa as the Network Participation Fee.
- Monthly Fee Charged Quarterly
The FANF will be calculated monthly, but charged quarterly for the previous calendar period. For example, the first collection for the first quarter of 2012 will be in July 2012.
- Amount Varies Based on Multiple Factors
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.
- Merchant Category Code (MCC)
- Waived for Eligible Charitable / Social Service Organizations (MCC 8398)
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 at the moment, but early indications are that Visa will charge the FANF and then provide a rebate at a later date.
- Visa Income, Separate from Interchange
The Fixed Acquirer Network Fee is separate from interchange and is more like assessments in that the income generated from the FANF goes to Visa.
FANF & Your Business
At this point, the complexities and varying amount of the FANF lead us to believe that it will be passed by processors and acquirers directly to businesses on both bundled/tiered and interchange pass through pricing models. However, this will become more apparent as we have a chance to see the FANF in action as we review processing statements after April.