If you want to accept credit card payments, you’ll need a merchant account or a payment service provider. If you have one of those, you’ll inevitably have to pay several fees. And if you’re facing a host of fees, it’s best that you know exactly what they are, so you can prepare accordingly.
Card fees can fall into several categories, but in this guide, I’m going to focus on brand fees. These fees, which commonly show up on statements as NABU (Network Access and Brand Usage) fees, go to the credit card networks. For example, if you accept Visa card payments, the brand fees will go directly to Visa.
Let’s take a deeper look at this common credit card fee. I’m here to give you a better understanding of what it is, why it’s charged, and how much it can cost.
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What Are Card Brand Fees?
Card brand fees are, in essence, fees that you pay to a credit card network like Visa so you can accept credit card payments through your merchant account. Think of it like a monthly subscription to Visa or MasterCard that opens up the network’s credit card as a viable payment method for your customers.
I mentioned that card fees can fall into different categories, so let’s briefly take a look at them and see where brand fees fit in.
Interchange fees can often be confused with brand fees, but be warned - they’re not the same. These fees go to the card issuer, and will change according to several factors, such as the transaction sum and type of card the customer uses.
Payment Processor Fees
Payment processor fees, as you might imagine, represent the markup taken by your payment service provider. These fees are like a cut for the middleman, since the processor makes each transaction possible. Some providers charge additional fees, such as monthly fees or statement fees.
Also known as merchant services fees, these charges are what payment processors make their money from. To make sure you aren’t hit with fees you’re uncomfortable with, choose a payment service provider that’s upfront about its rates, like Pay.com.
This is where brand fees come in. Brand fees are considered to be assessment fees, which are paid directly to the credit card network. When you take assessment fees with interchange fees, you have what is known as a swipe fee - a total sum of fees that go to the card issuer.
Just to recap, interchange fees go to the card issuer, which is the bank that provides the card. Assessment fees, or brand fees, go directly to the credit card network. When you combine them, you have a swipe fee which can be a useful sum to track your business expenses.
When Are Card Brand Fees Charged?
Some card brand fees will be taken on a per-item transaction basis, while others will come out of your account on a monthly basis. As such, it’s important to keep an eye on your statement to make sure nothing falls through the cracks.
Card Brand Fees and Pricing Structures
Card brand fees can be split up into various pricing structures, so it’s worth knowing what you do that can affect how much you’ll owe to the credit card network. Bear in mind, some MSPs (Merchant Service Providers) will absorb some of the fees, so be sure to read the fine print and find out what fees you may be able to avoid.
Even if you’re clued up on your MSP and all the fees that you could face, it’s still a good idea to double check your statement to be 100%.
Here are the various card brand fee pricing structures you might come across:
Per-item Transaction Fees
Per-item transaction fees are calculated on an individual transaction basis, and are fees you’ll be charged for each time you process an electronic transfer payment. Generally, these fees will fall in the range of 0-5%, depending on the card network.
The fees for each transaction are broken down into a series of different types of charges, from a card-not-present charge to a network authorization charge.
Volume-based fees are charged according to the gross dollar volume of sales. As such, the more units you sell, the more you’ll pay in fees.
These fees are also divided into several different charges, including acquirer license fees and cross-border assessment fees.
Finally, there are several miscellaneous fees that I’ve grouped together for convenience. They include the following:
- FANF (Fixed Acquirer Network Fee)
- ISA fee
- Disputed charge
- Merchant location fee
- Dispute case
- Yearly registration fee
How Much Are Credit Card Brand Fees?
Credit card brand fees can add up, but to make sure they don’t take you by surprise, I’ve compiled a comprehensive overview of each major card network’s fees.
Visa Network Fees
Mastercard Network Fees
Discover Network Fees
American Express Network Fees
How Can You Keep Track of All Your Credit Card Merchant Fees?
While it’s absolutely imperative that you know all of the card fees you’re subject to as a merchant, I realize that it can seem overwhelming. If you feel this way, you’re not alone. Many merchants are faced with the tricky issue of how to stay on top of the torrent of fees that flood through the door every month.
Unless you’re a meticulous note-taker and love nothing more than recording information by hand, it’s unlikely that you’ll sit down each month or quarter to record all your credit card merchant fees. So how can you keep track of them without giving up a lot of your valuable time?
Here at Pay.com, we do the behind-the-scenes heavy lifting that merchants like you shouldn’t have to worry about. We’re not afraid to crunch the numbers and present you with a convenient way of tracking all your payments and fees.
The Bottom Line: Credit Card Brand Fees
Credit card brand fees are an inevitability if you accept card payments, so it’s worth learning about them to understand how much you’ll have to pay. Each network will have its fees, and payment processors will often charge their own too.
If you want a quick and easy way to accept payments on your website, Pay.com is the best solution. If you’re tired of spending all your spare time stressing over card fees on your statement, you can leave it to us. We’ll make it easy for you to see if you’re paying over the odds. Click here to find out how to get started.