The first time you see Visa FANF fees on your statement, it’s understandable that you’d have a few questions. You’re not alone: many business owners are unaware of these fees and how they’re calculated.
Visa’s FANF (Fixed Acquirer Network Fee) applies to merchant accounts that process credit and debit card payments. It’s a monthly fee that any business that accepts Visa cards has to pay, though the amount each business is charged does vary.
In this guide, you’ll find out exactly why these fees are charged, how high they can be, and whether there’s anything you can do to reduce them.
What Is the Visa Fixed Acquirer Network Fee (FANF)?
The Visa FANF is a recurring fee that applies to businesses with merchant accounts that accept Visa cards. It’s calculated at different rates, depending on your merchant category code (MCC) and other factors. The type of your business, whether it’s brick-and-mortar or an online store, will also have an impact on how much you’ll need to pay.
The FANF was first introduced over a decade ago as a way of offering merchants the option to bring down per-unit transaction costs. It was then known as the Network Participation Fee (NPF).
The inauguration of the fee disrupted the payment processing industry. It has since been renamed the Fixed Acquirer Network Fee, and it uses fixed rates based on various factors.
Your payment processor typically handles the FANF for you, including it in your monthly statement. If you’ve only recently become aware of this fee, that could be the reason: it can easily slip by unnoticed.
When and How Are FANF Fees Charged?
FANF fees are calculated on a monthly basis, but charged from your account each quarter. This means, for example, that you would find out what you owe for the month of August at the end of September.
Your payment processor transfers the fee to Visa.
Who Has To Pay FANF Fees?
If you’re a business owner and you use a merchant account to process Visa cards, you’ll have to pay FANF fees. The fee applies to all Visa cards, including credit and debit cards, whether you operate a card-present or card-not-present business.
There are a couple of important exceptions:
- If your monthly sales volume from card-present transactions falls under $200, you’ll be exempt from Visa’s FANF fees.
- If you run a charitable organization registered in the US which falls under the MCC 8398, then Visa will waive the FANF fees altogether through a rebate issued after the fees have been charged.
How Are FANF Fees Calculated?
FANF fees are variable, and they’re calculated according to a set of criteria set out by Visa. To get a clear idea of how much you would pay in FANF fees if you use accept Visa payments, here are the criteria taken into account:
Merchant Category Code
Your merchant category code is what classifies your business according to the type of services or products you offer. It’s assigned to your business the moment you open a merchant account. In the eyes of Visa, this MCC is intrinsically tied to your sales volume, so FANF fees can vary according to the category code you belong to.
Some of the MCCs that fall under the high sales volume category, and are therefore subject to the highest Visa FANF fees, include:
- Airlines (3000–3299, 4511)
- Department Stores (5311)
- Grocery Stores and Supermarkets (5411)
- Movie Theaters (7832)
- Wire Transfers (4829)
Generally speaking, the MCC isn’t likely going to increase the sum you pay drastically unless you have more than 50 locations.
Type of Business
Another key factor in calculating your FANF fees is the type of business you own. For this purpose, there are two types of businesses: card-present businesses and card-not-present businesses. Let’s take a closer look.
1. Card-Present Businesses
A card-present business is one that processes payments at physical locations with a card reader or NFC technology. If you run this type of business, Visa will determine the amount you’ll pay in FANF fees according to how many locations you have. Businesses with more locations pay higher rates.
What would this look like in action? Let’s say you have 1-3 locations, and you fall into a high sales volume MCC bracket. Your FANF fees would be $2 for each location and an additional $2.90 for the high sales volume MCC.
The following table shows exactly how much you’ll have to pay in FANF fees based on your number of locations:
2. Card-Not-Present Businesses
A card-not-present business is one that accepts payments from consumers either online or through manual card data entry. If customers provide credit card information over the phone or via email, then it falls under the classification of card-not-present.
In this case, Visa calculates FANF fees according to your gross Visa card processing volume. Let’s say your gross Visa card processing volume is $1,250-$3,999. If this were the case, you’d pay Visa a monthly FANF fee of $7.
To see what bracket you fall into and how much you’re likely to pay in FANF fees, you can use the following table as a reference:
As you can imagine, this means that card-not-present businesses face higher FANF fees, since it’s calculated according to sales volume.
Not every business will pay a fixed dollar sum, though. For example, if you have a monthly sales volume from card processing of $200-$1,250, then your FANF fees will be calculated as 0.15% of the total volume.
If your business accepts both card-present and card-not-present transactions, you’ll face FANF fees from both, and they’ll be calculated as outlined above.
Can You Reduce FANF Fees?
Since FANF fees are based primarily on sales volume, it means there’s no way to reduce them: as your business grows, the fees grow as well. Of course, the upside of higher fees is what it says about your business: you’re moving in the right direction.
However, there’s a chance that you could be overpaying on fees if your payment service provider is adding its own fees on to your regular FANF fees.
At Pay.com, we offer you full transparency and a convenient way to keep track of all your fees, so you can rest assured you’re not paying a premium. Click here to learn about the other features we offer.
The Bottom Line: FANF Fees
Visa’s FANF fees are inevitable if you accept Visa card payments. That said, while FANF fees are non-negotiable, the fees you pay to different payment processors can vary wildly.
Your best bet is to make sure you’re using a transparent payment service provider that lets you accept Visa and any other payment methods you need.
Pay.com is the business-friendly solution to payment processing. Not only do we offer full transparency, but also a quick and easy setup process. Whether you’re just starting out or switching over from a different provider, we can have you up and running in no time.