Acquirer Processor Fee (APF) – Things Every Merchant Should Know

August 18, 2021/ Posted in Fees and Rates

In the US, there are over 30 million small businesses according to the Small Business Administration’s (SBA) Office of Advocacy. The competition is fierce and getting merchant processing services can be your solution, but keep in mind that these come with a certain acquirer processor fee (APF). All merchants want to have the best pricing and transaction options for their customers, and if you’re a company owner aiming to learn more about this topic, you’re at the right place.

Credit cards (CCs) are more and more present nowadays in many types of businesses and cashless payment has many benefits, for both merchant and final user. If you’re new at this, or you have never used this kind of service before, knowing what a CC convenience fee is and informing yourself about mistakes business owners make is one of the first things to do. When you start accepting plastic as a form of payment, you should check what you’ll pay exactly for this service. It may seem like an easy process, but let’s see what’s happening there.

What Is an Acquirer Processor and How It Affects Your Small Business?

Payment processors are financial institutions that work in the background that will process securely and complete transactions of CC or DC. It’s a direct connection between merchants, the network, and the acquiring bank. It can also be a payment gateway that will facilitate the acceptance of expenses. So, once you learn how credit cards processing (CCP) works, you can include some research time for getting to know what a good effective rate for credit card processing is, too.

If you’re wondering what the difference between merchant acquirer and payment processor (PP) is, then you should check the following facts:

  • Acquirer (or merchant bank) – financial institution or a bank that will process credit and debit cards transactions for a business owner.
  • Acquirer processor (payment processor) – a company that business owners select to handle card transactions for their business acquiring bank.

What Is an Acquirer Processing Fee?

APF is a way that payment card networks charge the assessment fees for US merchants and enables them to accept their cards at the point of sale (POS), no matter if it’s a physical store or online. How cashless payments work and what the average CCP fees are (all three kinds of them: transactional, flat, and incidental) is essential to know. Not just because you will be more in control of your monthly expenses, but because you’ll also get to know how you need to act in the future.

Let’s take Visa as an example: The essential thing to know is that the amount charged for APF is flat and it is $0.0195 per authorization for CCs. Another fact that will help you and your business operation is that APF is different for credit and debit cards. Firstly, for card transactions, APF was $0.0195 per authorization, and now it’s reduced to $0.0155. Another thing to learn is that APF isn’t applicable for PIN debit transactions – only for signature-based ones.

Visa vs. MasterCard – Learn How Payment Works for Each Network Card and Their Amount for Fees

When you learn what a merchant account is and how to set one up, you should check the differences in assessment expenses that will probably have diverse names, depending on the network (association). One more difference is the amount of money charged.

MasterCard’s Network Access and Brand Usage (NABU), put in action in April 2009, is often considered the equivalent of Visa’s APF. But, the amount charged by the two networks isn’t the same. An amount of $0.0185 is charged by MasterCard’s NABU and it stands for all US-based sales and CD and refund transactions. Regardless of the fact if a transaction is realized or not, Visa will charge its APF. MasterCard, on the other hand, will not.

Ensure you know the cost of Mastercard's NABU

How to Easily Locate the Acquirer Processor Fee on the Monthly Statement

Running businesses isn’t an easy task. There are ups and downs, and you’ll learn something new every day. For example, an eCommerce business is very useful once you get the basic information. The same stands for processing and analyzing statements. When we talk about APF, the important thing is to know that this fee will have different names and abbreviations, depending on the processors that use it. So, if you run into Network Access Fee or ACQR Processor Fee, don’t panic, because it practically stands for the same thing.

Depending on the PP and pricing model, the location of APF on the statement will differ. That’s why some will be under Visa assessment expenses and others under other charges that will be more challenging to spot. Notice also a very important fact – are credit and debit APF separated? If yes, then the pricing will be different.

Make Sure You Analyze the Statement Correctly and Notice the Padded Fees

Good customer service is one of many ways you can improve businesses. To make that happen, you should first learn how to efficiently and correctly analyze the statement. So, ensure you understand that Visa takes directly the amount paid for APF and your PP doesn’t hold the right to take any part of it. Wholesale processing costs paid for enabling and maintaining the entire system of cashless payments is a group where APF belongs.

Choosing an interchange-plus pricing model is the best way to ensure you have full transparency and that you’ll pay the lowest cost possible. However, if you’re still struggling with your monthly statement, you can ask professionals for help. Not only will a reliable and experienced credit card processing company help you analyze your statements, but they can also advise you of any kind of irregularities that should concern you.

Knowing how to analyze your statement is a crucial thing in the whole process

Merchant Fees for Small Businesses – The Most Common Ones

Merchants have to pay for each credit or debit card sale fee and they are known as qualified merchant discount rates. They are usually determined by merchant service rates and involve three components: interchange charge for service, assessment or service expense, and the payment PP’s markup. To make it easier, payments processors usually are in partnership with other companies or brands that are working directly with consumers and businesses. There’s a percentage of transactions that PPs charge, like card issuers, and a flat fee for purchases, no matter if credit or debit card is used.

How Do I Avoid Payment Processing Fees?

If you’re asking yourself are processing fees legal and how do I get out of processing fees (PF), know that it’s a more commonly asked question than you think. No one likes those extra expenses, and that’s why you need to ensure you know what flat rate CCP is and follow these steps:

  • Figure out which CC PF you are charged,
  • Protect your devices,
  • Stay PCI compliant,
  • Find the best merchant services for your company,
  • Avoid cancellation charges.
You can reduce some expenses when you understand how APF works

Learn How to Reduce Credit Card Processing Costs in the Best Possible Way

Having the possibility to choose your PP markup will mean a lot when there’s not much you can do when it comes to assessment fees. Even though they are the lowest ones you’ll face when introducing cashless payment options, you’ll probably still want to reduce any extra cost of accepting plastic.

The good news is that you can in most cases negotiate for your CCP expenses. You can negotiate with your CC PP by boosting your transaction volume. This is important because the more you sell, the more transactions you’ll have and, at the same time, more value will be added to the processors.

Customers’ Response to Credit Card Processing Services – How to Make the Best of It for You and Your Customers

If you want to make purchases easier for you and your customers, introducing the option of paying with plastic may be the best solution for you. Running a small enterprise takes a lot of energy since there are many rules and regulations to be followed, from tax deductions, figuring out how small businesses pay taxes, to creating and applying for a merchant account. To make it happen, you have to take all the necessary steps, and one of the most important ones is surely getting to know how APF works. Not only will it help your company grow, but you’ll also have loyal customers that will come back.

If your customers are satisfied, you'll be too

What Is a Competitive Markup and How You Can Benefit From It

When you’re an owner of a company, it’s up to you to decide on the prices for the services and products you’re selling. For that reason, it’s essential to understand markup pricing and how it works. The main thing you need to understand is that the price of the goods or services you want to sell should be higher than the cost of goods and labor. When you learn all its benefits and use all its advantages, you’ll be able to profit.

Markup refers to the strategy you can implement when deciding the prices of products or services – calculate the sum of the product and a percentage of it as markup. Here are advantages you can achieve:

  • Increases profits,
  • Recover costs,
  • Simple calculation.

So why do you see “markup” on your monthly statement? When you close a deal with a PPC, they will charge you the expenses of swiping plastic in your store, but in order to profit, they also need a markup. In other words, the markup you see on your statement is what the PPC makes.

Interchange Rates and Markup

The APF is applicable to all CC authorizations based in the US that are acquired in the US, and it is a part of the “interchange” (or wholesale) part of the statement. The average interchange rate in the US is around 0.3% for debit cards and 1.8% for CC. These charges are usually calculated as a percentage of the sale adding a fixed fee (for example, 1.80% + $0.10). That way, the issuer receives the optimal payments. The good news is that if the payments are done with plastic, the rate will be lower than those done with non-plastic transactions.

Knowing how markup works and taking advantage of its benefits will make your life easier

How to Choose the Best Merchant Services for Credit Card Processing

Professionals will make your life much easier if you’re struggling with this kind of process. Reliable credit card processing companies and APF will help you in tracking and spotting your statement when you know the right angle of checking. However, ensure you follow announcements Visa is updating for the increment of APF.