The term “Visa FANF fee” can be perplexing for many business owners when reviewing their credit card processing statements. Introduced by Visa in 2012, this fee stands for the “Fixed Acquirer Network Fee” (FANF) and plays a crucial role in determining credit card processing costs. For those unfamiliar with it, understanding how this fee works is essential for managing costs effectively.
This article provides an in-depth explanation of Visa FANF, how it’s calculated, its impact on businesses, and ways to potentially manage or reduce overall credit card processing fees.
What Is the Visa FANF Fee?
The Visa Fixed Acquirer Network Fee (FANF) is a recurring fee charged by Visa to cover the costs associated with processing card transactions. Although called “fixed,” the FANF fee varies for businesses based on factors like business type, sales volume, and transaction environment.
It applies to all businesses that accept Visa payments, regardless of whether transactions occur in person or online. The fee is assessed monthly but billed quarterly, which can make it harder to spot on a typical credit card statement.
Why Does Visa Charge FANF Fees?
Visa imposes the FANF fee as a way to offset operational and administrative costs associated with maintaining its card network. It’s part of Visa’s strategy to ensure the seamless functioning of card transactions across businesses of all sizes and types.
How Are FANF Fees Calculated?
Despite the “fixed” part of its name, the FANF fee isn’t uniform. The fee is calculated based on several key factors, including:
Business Type: Card-present businesses (e.g., physical stores) and card-not-present businesses (e.g., eCommerce sites) are charged differently.
Number of Locations: Businesses with multiple locations may pay higher fees.
Transaction Volume: The more Visa transactions processed, the higher the potential FANF fee.
Merchant Category Code (MCC): Certain industries, such as airlines or grocery stores, fall into high-volume categories and are charged differently.
FANF Fees for Card-Present Businesses
Businesses that accept card payments in person, such as brick-and-mortar stores or service providers, are charged FANF fees based on the number of locations. Here’s a general breakdown of how this works:
| Number of Locations | FANF Fee (Per Month) |
| 1 Location | $2 |
| 2 to 5 Locations | $4 Per Location |
| 6 to 10 Locations | $8 Per Location |
| 11+ Locations | $15 Per Location |
For high-volume businesses—such as grocery stores, gas stations, and fast food outlets—the per-location fee may be slightly higher due to increased transaction volumes.
High-Volume Merchant Categories
Businesses with a large transaction volume or certain Merchant Category Codes (MCC) are subject to a higher FANF fee. These businesses include airlines, department stores, supermarkets, and lodging providers. This higher fee reflects the increased strain their high transaction volume puts on Visa’s network.
FANF Fees for Card-Not-Present Businesses
For merchants that primarily process transactions without a physical card present, such as eCommerce stores or businesses accepting payments by phone, FANF fees are determined by the total volume of Visa transactions per month. Here’s a rough guide to the fee structure:
| Monthly Visa Volume | FANF Fee (Per Month) |
| $0 to $50,000 | $15 |
| $50,001 to $199,999 | $45 |
| $200,000 to $399,999 | $120 |
| $400,000 to $799,999 | $350 |
| $800,000+ | $1,500 |
Card-not-present businesses generally incur higher FANF fees compared to card-present businesses due to the higher risks associated with remote transactions.
Examples of How FANF Fees Are Applied
To provide a clearer understanding, here are a few scenarios explaining how FANF fees would be applied based on different business models.
Scenario 1: Single-Location Card-Present Business
A small retail store with one physical location processes all Visa transactions in person. Based on the fee structure, this store would pay $2 per month in FANF fees.
Scenario 2: Multi-Location High-Volume Business
A fast-food chain with five locations is classified as a high-volume business. According to the Visa FANF fee schedule, each location is charged $4 per month, resulting in a total of $20 in monthly FANF fees.
Scenario 3: Mixed Transactions
A restaurant with two locations processes 85% of its transactions in person and 15% online. The FANF fee calculation would involve two steps. The in-person locations are charged $4 ($2 per location), while the online sales volume (assumed at $20,000 for the month) would incur an additional $15, making the total FANF fee for the business $19.
When Are Merchants Exempt from FANF Fees?
Not every business has to pay FANF fees. There are a few exemptions:
Low Transaction Volume: Merchants processing less than $200 in Visa transactions per month are exempt from FANF fees.
Nonprofit Organizations: Charitable organizations registered under Merchant Category Code (MCC) 8398 in the United States are eligible for FANF fee rebates, effectively exempting them from the charge.
Understanding FANF Fees on Statements
Merchants often find it confusing when comparing statements because FANF fees are charged quarterly but calculated monthly. This means businesses might not see the fee listed every month, and when it does appear, it might reflect several months of charges at once. Tracking these fees regularly can help prevent surprises when quarterly bills arrive.
Is the FANF Fee Negotiable?
The FANF fee is set by Visa and, unfortunately, cannot be negotiated. However, some processors may “pad” assessment fees, inflating the amount charged to merchants. This means some businesses could end up paying more than they should.
To avoid overpaying, it’s important to carefully examine processing statements and understand each line item. Seeking assistance from a payment processing consultant can also help identify any padded fees.
Ways to Reduce Processing Costs Despite FANF Fees
While the FANF fee is non-negotiable, there are still strategies to reduce overall credit card processing costs:
Review and Compare Processors: Not all processors charge the same markup on top of the FANF fee. Comparing different service providers can lead to savings.
Negotiate Other Fees: While FANF fees are fixed by Visa, other processing fees such as interchange rates and markups can often be negotiated.
Use a Consultant: Payment consultants specialize in reviewing processing statements and can uncover hidden fees or inflated charges. This service often saves businesses significant amounts of money without requiring a change in processors.
Conclusion
The Visa FANF fee is an essential aspect of credit card processing costs for any business that accepts Visa payments. While it cannot be negotiated, understanding how it is calculated and appears on statements can help businesses manage their expenses more effectively. By staying informed and reviewing statements regularly, merchants can avoid overpaying and identify opportunities to reduce other processing fees.
FAQs:
What is the Visa FANF fee?
The Visa FANF fee is a recurring charge imposed by Visa to cover the costs of maintaining its card transaction network. The fee varies depending on the business type, transaction volume, and transaction environment.
Can the FANF fee be negotiated?
No, Visa FANF fees are set by Visa and are non-negotiable. However, some payment processors may inflate other fees, so it’s worth reviewing statements carefully.
How often is the FANF fee charged?
The FANF fee is calculated monthly but billed quarterly, meaning it may not appear on every statement.
Are any businesses exempt from the FANF fee?
Merchants processing less than $200 in Visa transactions per month and registered charitable organizations (MCC 8398) in the U.S. are exempt from FANF fees.
How can businesses reduce credit card processing fees?
While the FANF fee is fixed, businesses can still lower other processing fees by negotiating with their processor or using a payment consultant to review and optimize their fees.