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Education

ume. Likewise, there is an acquirer processing fee (APF) not properly managing their dispute process may fail to
and network access brand usage (NABU) authorization fee actively accept incoming compliance or pre-arbitration
of $0.0155 to $0.0195 for every authorization. Cross-border cases. When that occurs, the dispute may kick over to
fees represent over 1 percent for U.S. merchants for every an arbitration case; merchants are unknowingly finding
non-U.S. transaction. Both Visa and Mastercard also have themselves in arbitration and losing the case in addition
monthly fees. These fees are all relatively more known. to the significant card network NIPTF referenced above.

Not so well known are non-interchange pass-through fees Mischief managed
(NIPTF), which are more sinister and growing. I say "sin- NIPTFs are large and growing. Merchants need to un-
ister" because they can represent an enormous amount of derstand them and recognize that not all processors or
a merchant's fee, and dozens of these fees are added with- gateways are equipped to minimize them. Platforms and
out the semiannual press releases that accompany inter- payfacs must understand how these fees are applied and
change modifications. The table accompanying this article ensure they are properly conveyed and debited to the
provides several examples. The entire list is much longer. appropriate end merchant so as to not unnecessarily ab-
sorb them. Sales professionals need to assist merchants
I've seen instances where merchants generated over tens in reviewing their statements and placing them with the
of thousands of dollars in these fees. Merchants not us- payfac or processor who can mitigate the impacts of these
ing tools to ensure authorization fidelity or merchants uti- fees.
lizing dispute services are more apt to suffer these fees.
For example, merchants who haven't set their gateway to As founder of Humboldt Merchant Services, co-founder of Eureka
exclude "hard declines" from recurring transactions will Payments, and a former executive for such payments innovators as
incur these fee types. WePay, a division of JPMorgan Chase, Ken Musante has experience in
all aspects of successful ISO building. He currently provides consulting
Inadvertent arbitration services and expert witness testimony as founder of Napa Payments
Merchants not attending to their authorization hygiene and Consulting, www.napapaymentsandconsulting.com. Contact him
will produce many inadvertent NIPTFs such as the "Mis- at kenm@napapaymentsandconsulting.com 707-601-7656 or www.
use of Auth Fee" and similarly situated fees. Merchants linkedin.com/in/ken-musante-us.

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