FANF stands for Fixed Acquirer Network Fee. This fee is a non-negotiable baseline charge that comes from Visa. It directly relates to the amount of revenue you process each month. The fee cannot be changed by merchant account providers because it’s instituted by the card brands.
A FANF fee usually costs around $2.90 a month if you operate a single stand-alone retail location. On the other hand, larger companies and franchises pay increased fees based on the number of stores they operate. Visa has a tiered pricing system that determines this price. But simply put, it goes up steadily as franchises expand.
The fee also changes based on Merchant Category Code or MCC. Your MCC is determined by your payment processing provider. It’s the shared designation for your industry type that is recognized by card companies like Visa. They’ll review your MCC to determine the FANF fee that’s most appropriate for your business.
In 2015, Visa changed the rules when it comes to grouping payments. For example, payment facilitators lost the ability to combine businesses with different Tax IDs under a large company. On the other hand, they reduced the fees charged to smaller businesses. If you have a monthly volume of under $200 the fee isn’t charged at all.
The previous name for the FANF fee was the Network Participation Fee or NPF. They changed the name back in 2012 along with a few details on how the payment works. It occurs as a quarterly charge because the cost is so minimal and billing is more convenient for Visa and business owners if it’s only charged four times a year.
Card-not-present or CNP transactions are payments made with credit cards when the store doesn’t see the physical copy of the card. This is most common for ecommerce stores or any merchant selling goods over the phone. CNP has a slightly higher level of risk because businesses are unable to verify who the owner of the card is. In this sense, they are slightly less secure than in-store purchases.
As mentioned above, merchants are charged according to the type of transaction that occurs and whether or not the credit card is physically available at the time of purchase. Additionally, there are exceptions for charities. Any organization with the MCC code 8398 is considered a charitable or non-profit business. Visa plans on providing a rebate for companies in this sector.
Some merchants may bundle all credit card processing fees together, but when you break down each charge separately, you can see who is charging each small percent of the overall fee. Interchange fees is the most common one that is paid to all credit card issuers. The major ones being Visa, Mastercard, and American Express. This varies by the card type. Debit transactions are lower in cost than ones made with credit cards.
Payment processing fees are made to the company that operates your merchant account. They are clearly stated at the time you apply for your new account, and are charged each month based on your sales volume and transactions.
Lastly, assessment fees are paid as a standard rate to credit card companies. They vary each month depending on the card brand and again are paid directly to the card company. Moreover, these are often combined with interchange fees to show what’s called a swipe fee.