FANF Fee – Visa Fixed Acquirer Network Fee

Credit card statements might be confusing if an individual doesn’t know much about them. If they notice that there is a Visa FANF fee in their statement, and they would like to learn more about it. Visa Fixed Acquirer Network Fee (FANF) is a charge most companies have to pay if they use Visa cards. This fee differs from others because it doesn’t have a set amount, which can be confusing.

Understanding the Visa FANF Fee

Launched in April 2012, Visa FANF can be considered as a fee levied on businesses which are accepting Visa cards to fund network maintenance. The fee is based on business type, number of establishments, and monthly volume.

There are two main categories for FANF calculations:

• Card-present (CP) businesses (in-person transactions)
• Card-not-present (CNP) businesses (online or phone transactions)

In the case of card-present business, fees are based on merchant category code (MCC) and number of locations. But in the case of Card-not-present companies, they are charged according to their Visa transaction volume for each month. Though companies with sales volumes below $200 per month are exempt from the fee, since higher sales volumes can result in substantial fees, they are charged as a percentage or flat rate depending on volume ranges. FANF fees are non-negotiable and fixed, and they show up on quarterly statements because they accrue monthly, which can be confusing.

Calculation of Visa FANF Fee

Understanding the calculation formula is essential for clarity on these fees as Visa FANF fees are variable costs, not fixed, which can confuse merchants.

There are some specific factors that affect FANF fees, which are generally:

• Number of card-present locations a merchant operates.
• Monthly gross sales from Visa card-not-present transactions.
• Special considerations for high-volume merchant category codes (MCC), fast food, and unattended terminals.

Fees are calculated per merchant taxpayer ID, affecting all accounts under that TIN, however, merchants with multiple locations may face complex calculations for their FANF fees.

Who Is Responsible For Covering The Cost Of FANF?

Merchants applying to merchant accounts to Visa card transactions are obliged to pay FANF fees and the fee is applied to every Visa card, whether they are debit or credit cards, accepted at this establishment. In addition, FANF fees are charged for both CP and CNP transactions, and with that comes the exception of FANF fees when monthly card-present sales are below $200. Not-for-profit charitable organizations in the US that are registered with MCC 8398 can get a rebate that does away with FANF fees once charged.

In A Merchant Account, Where Is FANF Mentioned?

FANF may be presented under different labels on merchant accounts, such as Visa Fixed Acquirer Network Fee and High-Volume Card Present Fee. Different appearances of such fees may come depending on different types of transactions: card-present and card-not-present.

When implementing a flat-rate pricing structure, FANF is not always itemized, but it does get incorporated within the total rate with regular examination of the merchant statements monthly in order to monitor FANF charges and observe their effect on costs.

Taking initiative to look up the various names of FANF or asking the payment processor for a fee breakdown in detail. Business operations, like volumes or locations of transactions, affect FANF fees, so keeping these metrics under observation to control the budget will be more efficient.

How Visa’s FANF Fees Can Impact Card-Not-Present Business

Visa transactions by merchants employing manual card capture are classified as card-not-present (CNP) transactions. Unattended terminal transactions and fast food restaurants also fall in the CNP category for FANF ratings.

Here, the Visa FANF fees are determined according to the monthly gross processing volume of Visa transactions, and the changes in the monthly transaction volume result in the variations in the FANF fees on statements.

Business Types

It is important to note that the fees associated with FANF are determined by the kinds of business being operated, which can fall into two main categories:

• card-present (CP) businesses (involving physical card swiping) and
• card-not-present (CNP) businesses (involving online or phone transactions).

Properly identifying the business type is essential for calculating fees correctly.

Card-Present (CP) Business

CP business is a payment process in physical locations through card readers or NFC. Visa charges FANF fees depending on the number of locations a company has; the more locations, the higher the fees.

For example, a company with 1-3 units in an MCC bracket of high volume of sales pays $2 per unit and an extra $2.90 for the high-sales volume category.
But Merchant Category Codes (MCC) classify businesses by types of transactions and the high-volume MCC categories, which generally include:

• Airlines: Scheduled/non-scheduled air transport.
• Auto Rental: Renting/leasing passenger cars.
• Lodging: Overnight accommodations.
• Discount Stores: Retailers with reduced prices
• Warehouse Stores/Wholesale Clubs: Bulk merchandise sales.
• Supermarkets: Full-service grocery stores.
• Department Stores: Major retailers with diverse products.
• Car & Truck Dealers: New and used vehicle sales.
• Tire Stores: Specialized tire sales/services.
• Petroleum: Service stations.
• Clothing Stores: Apparel retailers.
• Furniture Stores: Home furnishings sales.
• Drugstores: Pharmacies.
• Electronics Stores: Consumer electronics retailers.
• Theaters: Venues for live performances/movies.
• Fee assessment for merchants without customer presence is based on monthly gross sales volume from Visa cards, and the Fee structure is determined as:
• Merchants with sales under $50 pay $2/month.
• Merchants with sales over $400 million pay $40,000/month.

Moreover, fee structure scales with merchant sales volume, aligning charges with transaction activity.

Card-Not-Present (CNP) Business

Unlike CP business, an online CNP business takes payments over the internet or by manual entry of card information. That typically includes circumstances where consumers offer information on credit cards via phone or by email.

Visa, on the other hand, charges FANF fees using the total Visa card processing volume. Sometimes, if a volume of processing ranges from $1,250 up to $3,999, then the FANF fee for the month will be figured out to approximately $7.

Visa FANF Examples

First example is that of a single-location business that does only card-present transactions and pays $2 per month.
Second example would be when a high-volume merchant with 5 locations, processing only card-present transactions, pays a total monthly fee of $20 ($4 per location).

And finally, the third scenario is when a restaurant with 2 locations, with a combination of card-present (85%) and online transactions (15%) has a total fee of $19. This typically consists of $4 for the locations and $15 for $20,000 in card-not-present (CNP) sales.

Changes To The FANF

Visa revised their Fixed Acquirer Network Fee (FANF) to offer greater flexibility for businesses in April 2015, and with it, Visa revised their Fixed Acquirer Network Fee (FANF) to provide greater flexibility for businesses.
The companies with less than $200 in monthly sales have now been exempted from the FANF, saving costs for small businesses, and the sales between $200 and $1,249.99, the FANF was altered to 0.15% of gross sales rather than a specific dollar amount.

Later, these alterations seek to relieve financial stress on small traders, particularly in the months of low sales. The revisions show a shift in payment processing towards charges that correlate with business activity levels, enabling businesses to better control expenditures.

Conclusion

Understanding the Visa Fixed Acquirer Network Fee (FANF) is important for businesses that take Visa cards. The fee, which helps fund network maintenance, varies based on business type, number of locations, and monthly sales volume.

By knowing how these fees are computed and monitoring their merchant statements, businesses can efficiently control these expenses. Recent FANF modifications, such as exemptions for small retailers and percentage fees in low-sales months, also benefit firms by helping them match their costs with their activity level. Being current on FANF benefits company owners with improved budgeting and reduces confusion.