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Table of Contents

Lead Story

Partnerships fuel portfolio growth


Industry Update

Direct Air's bankruptcy threatens JetPay

Coalition responds to retailers' debit rule complaint

Consultancy faults PCI tokenization guidance

Heartland breach suit settled

Selling Prepaid

Prepaid in brief

Expo meets expectations in atmosphere of change

Prepaid goes to Washington


Choosing a partner for life

Justin Milmeister
Elite Merchant Solutions

Technology, a catalyst for ISO growth

Mustafa Shehabi
PayCube Inc.


Street SmartsSM:
Plotting a prosperous future

Jeff Fortney
Clearent LLC

Is it time for you to resell integrated payment systems?

Paul Hunter
Sterling Payment Technologies

As a PCI compliance role model, how do you measure up?

Heather Foster

Use new card fees to build merchant rapport

Jeffrey Shavitz and Adam Moss
Charge Card Systems Inc.

Working with outside marketing experts

Peggy Bekavac Olson
Strategic Marketing

No more contract-signing hurdle

Steve Norell
US Merchant Services Inc.

Company Profile

Electronic Payment Exchange

New Products

Wireless payments at the restaurant table

Company: Viableware

Driving donations online for nonprofits

eSelectPlus with DonorDrive
Company: Moneris Solutions


Don't let hot leads slip away


Fulfilling brand promise



Resource Guide


A Bigger Thing

The Green Sheet Online Edition

April 09, 2012  •  Issue 12:04:01

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Use new card fees to build merchant rapport

By Jeffrey Shavitz and Adam Moss

In October 2011, the payments industry was faced with a major change due to the Durbin Amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. As we discussed in "Durbin - the aftermath" (The Green Sheet, Jan. 23, 2012, issue 12:01:02), ISOs wondered what effect the legislation would have on our industry and on their bottom lines.

Would ISOs see profit or attrition? Would they find opportunity? The industry also wondered when the next shoe would drop with regard to new fees. Well, has it dropped?

The Durbin Amendment was intended to protect merchants' bottom lines by reducing the cost of regulated debit cards. For the most part, mission accomplished. However, the amendment was not kind to card-issuing banks, which experienced tremendous loss of revenue.

Apparently, we are now seeing an attempt to recoup that income with the 2012 spring release from the card brands, specifically Visa Inc.

The 2012 release covers many areas, including dispute modifications, an increase on current fee structures, new interchange product categories and fees, revised qualification requirements, and changes in U.S. Visa acquirer fees.

While we don't know if these changes can be attributed to the loss of income from the amendment, by connecting the dots, we see a rationale for yet another increase of fees on merchants.

Some positive changes are taking effect in April 2012. For instance, Visa lowered the network acquirer processing fee on its debit cards by $0.004, to an amount of $0.0155 effective April 1, as well as the interchange fees for other card-present exempt debit transactions for a variety of industries.

More fees, little FANFare

The biggest change is in Visa's new Fixed Acquirer Network Fee (FANF), which breaks the program and corresponding billing into three categories:

Merchants that fall under these categories are now assessed a monthly variable fee based on a variety of factors. As an example, card-not-present merchants who process between $8,000 and $39,999 are assessed monthly fees of $15.

A merchant with a mix of card-present and card-not-present transactions may be assessed an additional monthly fee, based on the number of merchant locations. The FANF does not apply to charitable or social service organizations (MCC 8398).

Heading outrage off at the pass

How will you, a merchant level salesperson (MLS), handle phone calls from angry merchants reacting to this news? Explain that this is a brand fee being assessed on our industry by Visa; therefore, everyone will be assessed the same amount. You can even send merchants to to show that your hands are tied.

So, how do you turn this into a positive? Each time you speak with a merchant, you have the opportunity to reinforce your relationship. Remember, success in our industry starts with a firm foundation of trust.

Share with your merchants your frustrations and your thoughts on the origin of this fee. Use this opportunity to remind your merchants how you have looked out for their best interests, perhaps by lowering their rates if you have done so in the past.

As MLSs, we control only our interactions with our merchants. And we know those conversations tend to revolve around their fees and costs. Now may be an opportunity to initiate a conversation with all of your merchants, or maybe just your top clients.

Be proactive by calling them to tell them about the new fee. Our merchants are our lifeline. Let's make sure we use every opportunity to solidify our relationships.

Jeffrey Shavitz is a founder and Adam Moss is the Vice President, National Sales Manager, of Charge Card Systems Inc., a nationwide leader in merchant services offering a full suite of products and 12-hour funding. Shavitz is an active member of The Green Sheet Advisory Board and the First Data ISO Advisory Board; both Jeffrey and Adam are frequent contributing writers to The Green Sheet. They can be reached at or or 888-505-CARD. For additional information on CCS, please visit

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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