Fees 101: Understanding NABU – Network Access and Brand Usage (NABU) Fees

Have you received your merchant services statement recently and wondered what all the fees mean? It’s not uncommon for those new to credit card processing services to be a bit confused by all of the charges that may come with your invoice. Here’s what you need to know about the most common of them: card brand fees.

First, every card issuing company that you work with (including Visa, MasterCard, Discover, and American Express) will charge these fees on your statement. Sometimes referred to as Card Brand Fees, or even Card Association Fees, they get paid directly to these card issuers. They sometimes show up as NABU (“Network Access and Brand Usage”) next to the charge on the statement.

Who Benefits?

Because the money charged for card brand fees goes to the card (VISA, for example), the credit card processor doesn’t usually benefit. While some processors may charge a cost above this fee, your statement should break this out. If not, you can view the line item charge to see what the actual cost is and subtract that from what you were charged to know for sure.

NABU card brand fees help defer the cost of each transaction processed. They keep MasterCard and American Express in business to serve merchants who accept their forms of payment, either as a debit or credit card purchase.

What Do Card Brand Fees Include?

Fees vary by card issuer, bank, and your specific agreement with the processor. While not every merchant will pay the same, some common charges may make up these costs.

They include:

  • Credit and Debit Assessments – These fees are based on a percentage of volume, plus a charge per transaction. All card issuers charge these.
  • International Processing Fee – This is an extra charge for purchases made from cards that originate outside of the United States. It is also referred to as an International Assessment, Cross-Border Assessment Fee, International Service Assessment Fee (ISA), or International Acquirer Fee.
  • Processing Integrity Fee – This per-transaction fee is charged when charges are not settled within a suitable time frame (usually 24 hours for Card-Present sales, or 72 hours for Card-Not-Present sales.) These may also be called a Transaction Integrity Fee (TIF) or Noncompliance Fee. The card issuer may also charge a fee on top of this for detailing these charges on your statement.
  • Card-Not-Present Surcharge – This fee applies when a retailer or merchant charges a card that’s not physically available. It is also called a Digital Enablement Fee.
  • Account Status Inquiry Fee – Sometimes, it’s necessary for a merchant to check for available funds without making a charge. Card brands will charge a small transaction fee for this. It may also be called a Zero Dollar Verification Fee.

Other fees that cards can charge include a per-location monthly fee, Misuse of Authorization Fee, and various pre-authorization fees.

Depending on whether the charge is through Discover, MasterCard, VISA, or American Express, you can see between four and fifteen various fee types per statement. Costs range from a tiny $0.0025 per transaction to a flat fee of $15 per month for each kind of brand card fee. Some of the fees charged, however, are very rare and do not apply to all business types.

Why Pay Fees?

The costs associated with credit card processing may seem intimidating, but the benefits are clear. Having the ability to proudly display that you accept the major card brands can be a significant win for your business. As more people choose to carry an average of two or more major credit cards with them when they shop each day, it’s become apparent that consumers love choice.

Switching between a VISA and a MasterCard, for example — so that they can benefit from card rewards or optimal interest rates – is desired by smart shoppers. Knowing that your store accepts a variety of cards will help you remain competitive in today’s business world. These mandatory card brand fees may be a small price to pay for the type of customer experience most have come to expect.

How to Save on Card Brand Fees

While most of the NABU fees are set in stone with the credit card issuer and are not usually up for negotiation, there are ways to ensure that the number and scope of these charges remain manageable. Putting robust security features in place and using best practices for card acceptance can reduce some of the penalty fees that occur for transactions without a physical card or that don’t clear on time.
PayArc has special offers for foundations and nonprofits, sometimes providing processing at cost. For additional tips for managing your card account fees, see your PayArc  representative.