The new Visa "Fixed Acquirer Network Fee" (FANF)

Discuss the Visa & MasterCard payment networks as well as cards that operate through them.
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hypo21
 
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The new Visa "Fixed Acquirer Network Fee" (FANF)

Postby hypo21 » Tue Feb 28, 2012 11:35 am

So, is everyone aware of the new Visa "Fixed Acquirer Network Fee" FANF that will be in effect April 1 2012?

If not, you can read about it here. It appears Visa (and Mastercard shortly to follow) are attempting to make up for the loss they will face due to the Durban Amendment.

Either way, I want to know if anyone out there knows if this would be considered part of an Interchange fee that is directly the responsibility of the Merchant, or a fee that the Processor, or Acquirer, is responsible for? I know the fee will be passed down to the merchant and in some cases, added to cover the processing costs for collecting the required data, but is this fee a fee to the merchant or the processor?

I am curious as I work for a POS software company and most of our customers accept credit cards and are low ticket, high volume sales and this will affect them. I would like to be able to help them out as we are able to negotiate them with very low rates through a specific processor and we have a little bargaining power and I like to make sure our customers are not being taken for too much as the interchange rates alone are painful at times.

Thanks for any help and feel free to ask any questions you may have about the new FANF fee and how it affects you as a merchant, as I have been doing a lot of research on it.

Jason


Money card
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Postby Money card » Tue Feb 28, 2012 9:53 pm

Will less places start to take Visa and Mastercard like Discover? Or will places start to have a minimum amount to use your Visa and Mastercard like 25.00 minimum or 4 person if it's a restaurant?

I like this idea.

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Postby Money card » Tue Feb 28, 2012 10:00 pm

It mentions it excludes fast food restaurants. Will it exclude movies, grocery stores, cafes, etc?

DoingHomework
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Postby DoingHomework » Wed Feb 29, 2012 7:51 am

You really need to talk with your merchant bank. The fee, and how it is assessed, vary with type of merchant, volume, and card presence. There are also new fees for failed transactions lacking CPS verification. Those could be far more significant than the FNAF

hypo21
 
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Postby hypo21 » Wed Feb 29, 2012 8:07 am

Doing homework is right. There are other fees being added, or changed having to do with the interchange itself as stated.

As far as merchants not accepting Visa or MC, I doubt that will happen as they are the most used cards out there. Maybe the smaller merchants could do that but anyone with any volume would not want to lose that business. Unfortunately, there will not be anything they can do and it will just have to be paid.

Visa and MC basically just found a work around to the new limitations on the debit fees passed by the government to make sure they continue to grow in profits every year and keep the stock holders happy. In the end, the merchant is the one that gets hurt the most as usual.

3Dmerchant
 
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Postby 3Dmerchant » Tue Mar 06, 2012 6:28 am

Who is responsible for the fee? For merchants that are on 'pass through' interchange, this fee will be pass through without mark-up from the processor to merchants. (Others could still also pay depending on contract language.) If you read the fine print of the merchant agreement, pass through will include interchange and 'costs'. Clearly this is a 'cost'. Remember, this type of pricing is designed to minimize merchant fees by itemizing costs and then adding a mark-up which is a separate line item.

Grocery stores, discount stores, new car dealers and movie theatres are among those that fall under the new HIGH VOLUME, CARD PRESENT fee table. 1-3 stores is $2.90 per store, 4-6 stores is $4 per store. Big chains are getting the big hit, starting at 201 stores it's $25 per store scaling up to $85 per store. Visa will waive the Fixed Acquirer Network Fee for Charitable / Social Service Organizations (MCC 8398), and fast food.

I don't think any retail operation would stop taking Visa to avoid the fee as it could hurt their business. MasterCard is adding their own new 'annual fee' as well.

PortfolioManagementGuy
 
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Postby PortfolioManagementGuy » Tue Mar 13, 2012 7:45 am

The acquirer is responsible for the fee. They will be charged by Visa quarterly. Fast Food are not excluded, who ever is saying that, appears to be misled.

I assume most acquirers will pass the costs on to the merchant as a line item so the charge is blamed on Visa, not the acquirer.

Depending how the acquirer calculates the costs, some merchants, if they have both card present and card not present volumes, may be double charged for this fee.

I can't stand any government involvement, but how are they not stepping in on this one. This is purely to recover Durbin losses.

fredfurner
 
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Postby fredfurner » Sun Mar 18, 2012 2:04 pm

PortfolioManagementGuy wrote:The acquirer is responsible for the fee. They will be charged by Visa quarterly. Fast Food are not excluded, who ever is saying that, appears to be misled.

I assume most acquirers will pass the costs on to the merchant as a line item so the charge is blamed on Visa, not the acquirer.

Depending how the acquirer calculates the costs, some merchants, if they have both card present and card not present volumes, may be double charged for this fee.

I can't stand any government involvement, but how are they not stepping in on this one. This is purely to recover Durbin losses.


It was the government involvement that caused this all in the first place. Durbin totally screwed the industry. We knew this would happen. The government clearly doesn't understand the industry, and/or are just grandstanding to "appear" like they care. (likely the former because the avg. voter knows nothing about credit card fees) There is a cost to doing business, and acceptable returns from doing business. You cannot just swoop in and force price reductions and expect everyone to just role over and take loss.

They either go out of business, or find a work around (which they've done).
If you look at this as gouging or harmful to the merchants, just look at merchant fees prior to Durbin and compare to post Durbin. If the merchant was priced on interchange +, they saw a large savings (albeit unsustainable), if priced on tiered, they were screwed and FANF will screw them more.

Thanks Mr. Durbin!



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