How to Identify Dubious Credit Card Processing Fees, Part 1

I will not get into the particulars of the litigation — Heartland Payment Systems sued Mercury Payment Systems at U.S. District Court, alleging deceptive practices. However, merchants should understand there are no enforced business standards defining terms such as”interchange-plus pricing,””tiered pricing,””pass-through fee,””access fee,””foreign handling fee,” and a number of other terms.

Also, all providers don’t play by the very same rules. It’s possible for two suppliers to offer you the identical interchange-plus rate using the exact same monthly and yearly fees and yet Provider A can cost hundreds or even thousands of dollars more annually than Provider B. Likewise, two suppliers can propose the identical tiered rate with the exact same monthly and yearly fees, but the cost between the two suppliers may vary by hundreds or even thousands of dollars.

It’s this absence of enforced standards and transparency which frequently prevent merchants from having the ability to generate an apples-to-apples comparison when choosing a provider. My expectation is that the litigation will help provoke enforced criteria and desired transparency in the card processing industry.

Prices and Fees Merchants Must Know

Over the last two decades, I’ve addressed concealed, inflated, and suspicious fees. But, I will list significant fees in this article for the reader’s benefit. I’ll also state the true cost of those fees — i.e., the amount credit card companies charge merchant account suppliers — even if mentioned in previous posts, because some of these costs may have changed in my original article. My point is that suppliers often incorrectly price or explain these charges to merchants. I am hoping to help merchants understand the fees, to make better choices.

APF/NABU/Data Utilization Fee

Among ways that Visa, MasterCard, and Discover earn money is by charging a per-transaction fee. The card companies actually charge the merchant account supplier this fee and the supplier should pass through the actual fee to the merchant.

But some suppliers inflate these charges to make more revenue. They do this because they understand when a merchant sees”VISA APF FEE — 5.95 pennies,” for instance, on the announcement, the merchant will typically think Visa is charging the 5.95 pennies and not the chip. Most merchants do not realize that Visa is charging 1.55 to 1.95 pennies and the remainder of the fee is concealed revenue for the supplier.

I recently went through this specific situation with a merchant. The merchant had a $10 average ticket and was being charged a 5.95 pennies”Visa APF fee.” The merchant was paying 4 to 4.40 cents per Visa transaction more than it ought to have. It was also paying the inflated commission on MasterCard transactions. These inflated charges were costing the merchant tens of thousands of dollars each year.

Here are the true APF/NABU/Data Usage fees which ought to be passed-through into the merchant. Any amount above these amounts is in fact an improvement transaction fee charged by the supplier.

  • VISA APF Fee for debit cards: 1.55 cents
  • Visa APF charge for credit cards: 1.95 cents
  • MasterCard NABU Fee for debit and credit cards: 1.95 cents
  • Discover Data Usage Fee: 1.85 cents

Access Fee

This is not a genuine pass-though since the card companies don’t charge an”Access Fee” They bill the APF/NABU/Data usage fees, which are known in the business as access fees. Providers that record an”Access Fee” generally do this to inflate the APF/NABU/Data usage fee without calling the fee by its true name. By way of instance, if you see”VISA Access Fee — 3.69 cents” in your statement, call the supplier and have it clarify what other fees beside the authentic APF/NABU/Data usage fees are being added to its”Access Fee.”


Another manner Visa, MasterCard, and Discover earn money is by charging a percentage on the transaction. This is usually shown on the announcement as”Dues & Assessments” or just”Assessments.” Here again, the card companies charge the fee to the merchant account provider, which should only pass through the actual fee to the merchant. The actual assessment charges are shown below. Anything over this amount is an extra charge by the supplier.

  • VISA Assessment: 0.11 percentage
  • MasterCard Assessment $1,000: 0.13 percentage
  • Discover Assessment: 0.105 percentage

International Fees

The card companies also charge additional fees for cards issued by banks outside the U.S.. Some suppliers inflate these charges or make a fee in addition to those charged by the card companies. The proper international fees are shown below — the true name of the fee may vary by provider.

  • Visa International Service Assessment Fee: 0.40 percent
  • Visa International Acquirer Fee: 0.45 percentage
  • MasterCard International Cross Border Fee: 0.40 percentage
  • MasterCard International Support Fee: 0.85 percentage
  • Discover International Processing Fee: 0.40 percentage
  • Discover International Service Fee: 0.55 percentage

Some suppliers unite the Visa International Service Fee, MasterCard Cross Border Fee, and Discover Processing Fee together with the interchange rate for the specific card type used. In that case, the fee won’t be itemized on the statement.

Foreign Handling Fee

This isn’t a true pass-though fee as the card companies don’t charge a”Foreign Handling Fee.” They charge the fees mentioned previously. But some providers add their own foreign handling fee, such as”Visa Foreign Handling Fee- 0.30%.” Like the aforementioned”Visa Access Fee,” just because the fee says”Visa” alongside it on the statement does not mean it’s a Visa fee. Unfortunately, if you should call the supplier’s customer support department, the agent would likely tell you it’s a Visa fee. The representative isn’t necessarily lying: many customer service representatives don’t understand card company rates and charges.

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