Property owners and management firms that offer residents the option to use their debit cards to pay rent could find themselves with added transaction costs. As of April 1, 2012, VISA instituted a non-negotiable Fixed Acquirer Network Fee (FANF) to all VISA debit-card network banks that process debit transactions, although the debit card giant won’t begin collecting the fee until July 2012. The banks will determine if any of the FANF fee will be passed through to their clients—in this case, apartment owners and management firms. Information suggests that some apartment firms could absorb at least a portion of the new fees assigned to their banking partners.
The new monthly fees reflect a move by VISA to replace some of the debit-card transaction income it lost following the establishment of credit and debit card interchange fee regulations in 2010. The regulations placed limits on the fees companies like VISA could charge customers as part of the Dodd–Frank Wall Street Reform and Consumer Protection Act (P.L. 111-203, H.R. 4173).
While VISA reported lowering the Acquirer Processing Fee (APF), a separate fee that is passed on to merchant banks, from $1.95 to $1.55 for debit cards, the company declined to provide information about the FANF charges, citing that the specifics are proprietary information as part of the contract with the individual banks and VISA. However, available information suggests that the actual FNAF fee amounts will vary based on a number of factors, including how and where rent payments are processed. For example, there is one fee structure if residents pay rent with the debit card at the property management office, called a card-present transaction, and another fee structure if the resident pays rent using a debit card on-line or over the phone, a non-present transaction.
Card-present fees are determined by the volume of transactions and card non-present fees are calculated using the total dollar volume of all debit card transactions. Therefore, the fees for apartment firms that process a significant portion of debit-card rent transactions could run into the tens of thousands per year, while fees for firms with limited transactions or that only process such transactions at the rental office could range from a few hundred to less than a few thousand dollars a year.
Due to such variation, NMHC/NAA encourage owners to discuss the impact of the FANF fees with their payment-processing partner and their banks. While VISA acknowledged that the pass-through of such fees could influence apartment firms’ use of debit cards, the company reiterated that the fee is non-negotiable and that merchants must work with theirs bank and/or their payment-processing intermediaries to determine how much of the costs will be transferred to end consumers..