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What is Merchant Account Fixed Acquirer Network Fee (FANF)?

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All mentions of rate and fee costs are estimations based on publicly available information and client feedback. Actual costs may vary based on a variety of factors unique to your business.

A depiction of Merchant Account Fixed Acquirer Network Fee

Merchant Account Fixed Acquirer Network Fee (FANF) Explained:

The Fixed Acquirer Network Fee (FANF) is a monthly charge that Visa assesses to merchants who accept its credit cards. Introduced in 2012, this fee is designed to help cover the costs associated with providing electronic payment services and maintaining Visa’s global payment network. FANF varies based on several factors, including the type of business, the method of credit card acceptance (in-person or online), and the number of locations a merchant operates. By contributing to the maintenance and improvement of Visa’s electronic payment infrastructure, FANF ensures that merchants can offer secure, reliable, and efficient transaction options to their customers.

Understanding the Purpose of FANF

Visa’s FANF plays a crucial role in supporting the infrastructure that underpins electronic payments. This includes everything from fraud prevention systems to network upgrades that enhance transaction speed and security. For merchants, FANF is part of the broader cost of accessing Visa’s extensive customer base and the assurance of operating within a trusted payment system.

How FANF is Calculated

The calculation of the Fixed Acquirer Network Fee (FANF) is based on a tiered structure set by Visa. Key criteria include:

  • Sales Volume: Merchants with higher monthly sales volumes typically incur higher FANF charges. This reflects the increased usage and benefit they derive from Visa’s network.
  • Industry Category: The type of business a merchant operates in can influence the fee. For example, high-risk industries may face higher FANF rates.
  • Transaction Environment: FANF is also affected by whether transactions are primarily card-present (in-person) or card-not-present (online or over the phone). Each environment has a separate fee schedule, with card-not-present transactions often attracting higher fees due to the increased risk of fraud.

Examples of FANF Calculation

Consider two merchants:

  1. Merchant A: A retail store with multiple physical locations and a monthly sales volume of $100,000. Due to its high sales volume and multiple outlets, Merchant A may incur a higher FANF, which could be around $40 per month.
  2. Merchant B: A small e-commerce store with a monthly sales volume of $10,000. Operating solely online, Merchant B’s FANF could be lower, potentially around $2 per month, reflecting its smaller sales volume and single location.

How to Lower FANF Costs

While FANF is a fixed fee, there are strategies businesses can use to minimize its impact:

  1. Consolidation of Merchant Accounts: By consolidating sales under fewer tax identification numbers or merchant accounts, businesses can reduce the volume of transactions attributed to multiple outlets, potentially lowering their FANF bracket.
  2. Balancing Card-Present and Card-Not-Present Transactions: Businesses that operate both physical and online stores can optimize the balance between card-present and card-not-present transactions. Encouraging more in-person transactions, where feasible, can lower overall FANF, as these transactions often attract lower fees.
  3. Negotiation with Payment Processors: Some merchants may have the ability to negotiate lower FANF rates with their payment processors, especially if they are high-volume sellers or have a strong relationship with the processor.

Why FANF Matters for Your Business

Understanding and managing FANF is crucial for maintaining profitability, especially for small businesses or those operating in highly competitive industries. By taking proactive steps to optimize your FANF costs, you can enhance your bottom line while continuing to benefit from Visa’s robust payment network.