Right before the holiday shopping season, some credit card brands like MasterCard quietly announced new fees. Most notably was MasterCard’s Merchant Location Fee. Just what does this significant change mean for you and your business? We help you navigate through your statement and explain below.

 

What is MasterCard’s Merchant Location Fee?

First and foremost, allow us to clear the air: a merchant location fee should not be assessed by your payment processor. As a matter of fact, many businesses are assessed fees by credit card brands and it’s up to your processor to help spell these charges out for you to mitigate any impact fees may have on your business.

The Merchant Location Fee from MasterCard references a merchant’s number of business locations. This fee follows the model of other fees assessed by credit card brands like MasterCard and will be lower for payment facilitators than traditional acquiring institutions. MasterCard is charging payment facilitators annually to the tune of $3 per merchant location. Traditional acquirers are assessed a fee of $15 per location under MasterCard’s fee structure. Your processor may divide the annual fee to smaller payments over a year’s time.

This fee assessment came as a surprise to many businesses – when first announced, MasterCard’s Merchant Location Fee was not going to be assessed until the end of this year and would be based upon the total number of active locations at that time. Many businesses, however, began to see this fee appear on their statement as far back as August 2016, raising merchants’ eyebrows as to why the fee is being assessed ahead of schedule.

Credit card brands seldom share clear information about the fees they assess. Where interchange charges are very transparent, the MasterCard Merchant Location Fee is not. Fortunately, Payline has a reputation for being a transparent payment processor. The $15 fee assessed on the ISO side of our business is passed through at-cost and only when it is invoiced by MasterCard. The fee assessed to payment facilitators is not passed along to our merchants and is covered by Payline.

Experience Payments Differently

While other processors mark up the fees assessed by credit card brands like MasterCard, Payline is honest about the fees that appear on your statement. Be sure to work with a payment processor that will educate you on these fees and help lead you in the right direction.