The Electronic Transactions Association is pressing Visa Inc. to postpone the April 1 starting date for the new Fixed Acquirer Network Fee.
The acquiring industry did not receive sufficient notice of the new fee and is still waiting for details, says Greg Cohen, head of the Washington-based association’s Industry Relations Committee and president of U.S. operations at Toronto-based Moneris Solutions.
“We believe the brands should price as they want. It’s a free marketplace,” Cohen tells ISO&Agent Weekly. “But they should give our members a chance to implement the necessary technology and to communicate the situation to our merchants.”
Transaction processors have to make more technological changes to add a fee than to raise or lower an established fee, he notes.
At the same time, independent sales organizations and financial institutions are scurrying to meet contractual obligations to notify merchants of the fee and to inform third-party processors of how they want to handle the change, Cohen says.
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.
Visa informed acquirers of the fee on Feb. 9, just 36 working days before the deadline, according to a letter the association sent March 7 asking Joseph Saunders, Visa chairman and CEO, to postpone the start date.
In “guiding principals” published early last year, the association asked the card brands for at least 90 days’ notice of pricing changes.
The letter to Saunders, signed by 17 prominent members of the acquiring industry, said association members found it difficult “to digest” what the signers called Visa’s “lack of regard.”
In the letter the association is asking Visa provide guidance on handling the fee and to delay the start of the fee until 90 days after supplying the guidance.
Visa had not responded to a request for comment by the time ISO&Agent published this dispatch.
As it now stands, merchant acquirers processing card-present transactions (except those of fast-food restaurants) will pay $2 per month per location for up to three locations, scaling upward to as much as $65 per location for merchants with more than 4,000 locations, according to a Feb. 22 note to investors, from New York-based equity research firm Keefe, Bruyette & Woods.
Merchant acquirers processing high-volume card-present transactions will pay $2.90 per month per location for up to three locations, scaling up to $85 per location for merchants with more locations, the firm says.
For acquirers processing “customer-not-present” transactions (excluding fast-food restaurants), monthly fees will begin at $2 for the smallest merchants, rising to $15 monthly for merchants with monthly gross sales of $8,000 to $39,000 a month, according to KBW. The fixed fee will scale up to $40,000 per month for merchants with more than $400 million in monthly gross sales.
Visa simultaneously will reduce its network acquiring processing fee for Visa-branded debit transactions to $0.0155 per authorization from $0.0195 per authorization, KBW wrote.