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Significant Changes In Merchant Account Fees Require Merchant Statement Quotes!

It can be a daunting task to read and understand a merchant statement. Both Visa and MasterCard are coming out with some pretty significant changes this year – no doubt in response to the Durban Amendment’s impact on the industry. This will cause even more frustration on providing a merchant statement quote to your merchant customers.

I like this quote from, “ISOs also have to perform complex analysis and decide quickly whether to mark up the fee to cover the costs it will bring, teach employees the fine points of the new approach, and possibly hire additional help-desk workers to prepare for an expected avalanche of phone calls from merchants questioning or complaining about the fee, he contends.”

Are you ready?

First let’s talk about VISA’s changes:

1. The Network Acquirer Processing Fee (APF), although still $0.0195 per authorization on credit transactions, will be reduced to $0.0155 per authorization on VISA branded debit cards.

2. VISA debit card and VISA prepaid card purchase transactions that fail or do not request CPS qualification will be charged an addition Transaction Integrity Fee of $0.10 per transaction. Debit and key entered transactions without address verification will be the most commonly hit. By the way, this is in no way related to Interchange and Assessment fees.

3. VISA will also be charging a new Fixed Acquirer Network Fee (FANF) April 1, 2012. This is no doubt the most concerning fee of the bunch. In fact, the ETA is begging VISA to postpone the fee as merchant account providers simply are not yet ready to determine how this fee will be “properly” passed on to merchants. This new fee amount will be determined by a merchant’s taxpayer ID basis (TIN). VISA will determine the rate for each taxpayer ID based on channel and MCC, with quarterly collection starting with July 2012 for the previous calendar quarter. This will be assessed on a per location rate basis for all merchants with taxpayer ID, Fast Food Restaurants being the exception. It will cost an additional $2 per location for small merchants all the way up to $65 per location for massive chain stores! To top it off, higher-volume and card-not present retailers will pay even more per location.

4. CorpCard Level 3 rates will increase 15 basis points, and Corporate Card Electronic with Data rates will go up 10 basis points.

Now for the MasterCard changes:

1. MasterCard will be competing (???) With Visa to collect both a new annual Acquirer Licensing Fee and new Type III Third Party Processor (TPP) beginning July 2012. The full 2011 year volume will be the basis for the 2012 fees. Since only half of 2012 is covered (July to December) the 2012 fees will be 50% of the total calculated fees. Are you confused yet?

2. MasterCard is also starting a new Regulated debit small ticket debit and credit Interchange programs April 2012. This change is to help MasterCard better track small ticket transaction volumes, but the same Regulated debit rates will apply.

Finally, here are Discover’s changes:

Discover is the most modest of the bunch, only increasing its assessment fee by .005% at this time.

These are just a few of the many upcoming changes this year. Make sure to keep up to date and inform your merchants that these are widespread changes. Merchant Statement Analysis can help you to decipher all of these new fees and help your business to prosper. Click the logo towards the upper right of my blog for more details.



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