Fixed Acquirer Network Fee (FANF) introduced by Visa is significant and plays an important role in maintaining its payment system running smoothly for U.S. stores. Stores must pay this fee when they accept Visa cards, and it varies based on their business type, number of transactions, and other considerations.
This charge is calculated monthly but typically appears on store bills every three months, commonly referred to as the “Visa Network Fee.” Being aware of the FANF is critical for stores that desire to optimize their payment structures and control expenses.
What is FANF?
Fixed Acquirer Network Fee (FANF) is a fee charged by Visa on merchants that take Visa card payment. It varies with many considerations, including what the business sells for, what kind of transactions it conducts whether offline or online, and how many establishments the business owns. Visa first imposed this fee in April 2012 and initially named it the Network Participation Fee (NPF). Moreover, this fee assists Visa in financing the operations of its payment network.
The FANF is calculated differently for both in-store and online transactions. In-store transactions involve the use of a physical card, whether swiped or inserted into a terminal, and the fee varies with the number of business locations and whether the business qualifies under the high-volume category. For web transactions, the charge is charged based on how much the business handles in Visa payments per month. The FANF is computed monthly but is reflected on statements every three months, so it can sometimes look irregular or confusing.
Example of FANF Fee
Small Retail Store
For example- For small retail stores, calculating the Fixed Acquirer Network Fee (FANF) is easy. If the store processes $5,000 in monthly card sales and has one location, it pays $2.00 as the FANF. If the store has up to three locations, the fee is still $2.00 per location, making it simple to calculate. This fee structure is common for businesses where customers use card-present methods like swiping or dipping their cards during transactions.
Online Shopping
In this example, in an online shop where payments are made without using cards, FANF fees vary slightly. For monthly transactions between $1,250 and $3,999, the shop pays $7.00. This fee accounts for additional costs associated with online payments and helps the shop manage its budget effectively
Restaurant Chain
For instance, a five-restaurant chain has more to pay. For in-person transactions, the FANF is $2.00 per location, or $10.00. If the restaurant also has online orders and 20% of its $10,000 a month in sales comes from online orders, then the FANF for those sales is $7.00. Therefore, the total FANF fee would be $17.00.
This illustrates how various types of payments can alter the total fee. Having this information allows businesses to better control their costs.
Rates and Cost of FANF
As a merchant, the FANF you pay is determined by whether or not your business takes card-present or card-not-present payments. Visa applies various methods to determine the FANF on the basis of the kind of transactions that your business accepts.
Card-Present
There are multiple ways to pay, through card present and card-not-present transaction options. Card-present transactions occur in retail outlets when a customer pays using their credit or debit card. This can be done by swiping the card, dipping the chip into an EMV-enabled card reader, or utilizing contactless cards via NFC technology.
For companies that accept card-present transactions only, Visa estimates the FANF depending on the number of business locations you have and if your company experiences high sales volumes. Also, Visa charges FANF per location, so the more locations you have, the greater your overall FANF fee will be.
High Volume
Visa classifies businesses with a Merchant Category Code (MCC) when they acquire a merchant account. The MCC assists Visa in categorizing businesses that fall into high-volume for FANF fees. Airlines, automobile rentals, department stores, supermarkets, theaters, and electronics stores are some examples of high-volume businesses.
Moreover, they will normally have greater transaction volumes and therefore belong to high-volume categories. The MCC assists Visa in making sure that FANF is distributed equitably according to the business type and size.
Not High Volume
For card-present transactions, companies whose monthly sales are less than $200 do not pay a FANF. But those with monthly sales between $200 and $1,250 do not pay a fixed fee either. Visa instead charges them 0.15% of their total sales volume as FANF. This strategy tries to keep costs even for small businesses while making sure large companies pay accordingly in relation to their size and sales activity.
Card-Not-Present
Card-not-present transactions occur when individuals manually input credit card information rather than utilize a card reader. This can occur when a customer provides card information over the phone or by email, and it is entered into a virtual terminal. Online shopping is also included, whereby customers manually enter their card information on a checkout page.
Moreover, Visa has specific rates for these types of transactions. If a business sells less than $200 per month, they owe no fee. For businesses that sell from $200 to $1,249.99 per month, Visa takes 0.15% of the company’s overall sales rather than a fixed fee. This makes it easier for small businesses to pay according to how much they sell.
Where does the FANF Fee Appear on Merchant Statements?
The Fixed Acquirer Network Fee (FANF) may go by other names on your merchant statement, depending on the classification Visa uses for the fee in your business transactions. You may find it labeled as Visa Fixed Acquirer Network Fee, Fixed Network CNP Fee, High Volume Card Present Fee, Visa Network Fee, or FNF Fee. These names may differ depending on whether your transactions are card-present like purchases in your store or card-not-present such as Internet sales. Monitoring this fee is significant, as it represents a portion of your expense for accepting Visa cards.
If your business has a flat-rate pricing relationship with your payment processor, the FANF might not be listed separately on your statement. This does not imply that you are not paying the fee—it merely gets factored into the total flat rate your processor charges. Companies with tiered or interchange pricing models will be more likely to have FANF broken out as a distinct line item. It’s wise to review your merchant statements regularly, and you can request a breakdown from your payment processor if necessary.
Shifts in your business, such as opening new branches or processing increased or decreased transaction volumes, can also influence how much FANF you’re assessed. These changes might result in fluctuations in your statements over time. Monitoring these shifts will assist you in budgeting, planning ahead, and comprehending how Visa’s fees factor into your overall operational expenses. Even if the fee isn’t listed on the statement in an easy-to-read manner, it’s a good idea to look into it so that you’re aware of what you’re paying.
Calculation of Visa Network Fee
Visa’s FANF is a fee that is charged monthly depending on how much your company sells and the number of locations you have. Bigger companies pay a different fee than smaller companies, and whether the payment is done personally or online alters the fee for smaller companies.
If you have 1 to 3 locations, it costs $2 for each location, but multiple locations cost more. If your sales are below $200, you do not have to pay this fee. For sales from $200 up to $1,249.99, the fee is 0.15% of your sales. Fees tend to be higher for online payments than for payments made in person because only online sales accrue for those fees.
However, some things, such as what kind of business you’re in and your Merchant Category Code (MCC), may impact the fee as well. Large companies, such as grocery stores or airlines, may be charged more, and certain unusual businesses, such as fast-food places, may pay special fees. The FANF is charged against your taxpayer ID and is all the accounts that are tied together. It’s computed each month but will typically appear on statements every three months.
Examples of Visa Network Fee
Example of Card Present
For card-present transactions, the volume of locations and sales influence the FANF. For instance, if you have a construction equipment company with one to three stores, each store is assessed $2.00. For four to 10 stores, Visa charges $2.90 per store. Moreover, large-volume businesses such as grocery stores pay $2.90 per store for one to three locations, and $4.00 per store for four to 10 locations, and if there are additional locations then the the fee will increase depending on the locations.
Example of Card-Not-Present
For card-not-present transactions, such as an internet home crafts store, Visa estimates the FANF on the basis of sales per month. However, if your monthly sales are $1,250 to $3,999, you would be charged a monthly FANF of $7.00. This allows Visa to adjust the fee according to the size and type of the business.
Conclusion
The Fixed Acquirer Network Fee (FANF) is important for Visa to run its payment system. This fee affects how much merchants pay to process payments. Knowing how the FANF is figured out based on the number of stores, how many transactions they have, or what type of payments they take helps businesses plan for costs and improve their payment methods.
Since the fee can have different names or be included in flat-rate prices, it’s important for merchants to check their statements and understand the fee details. By keeping track of the FANF, merchants can better manage their money and control their costs while accepting Visa card payments easily.