What are Non-Transactional scheme fees?

Non-Transactional fees

Non-Transactional Scheme fees are fees related to processing payments that are not ‘net settled’, meaning that they are not subtracted from the settlement of the respective payments to which they apply, and are therefore calculated on an aggregated set of transactions. They are included on your monthly invoice with a billing delay. 

How Non-Transactional Scheme fees are charged

The reason why Non-Transactional Scheme fees cannot be charged on a per-transaction basis depends on the particular fee and the technical restrictions as a result of the complexity imposed by the card scheme, such as:

• The scheme fee is volume-based or calculated based on a tiered/stepped event.
• The scheme fee has complex relations to other transactions and is thus transaction history based.
• Adyen calculates the scheme fee based on reports from the card schemes.

When does Adyen charge Non-Transactional Scheme fees?

We calculate the Non-Transactional Scheme fees based on a full month of data. The data is available to us in the month after the transactions were processed. Therefore, the Non-Transactional Scheme Fees will appear with a billing delay on your invoice. In most cases the billing delay is one month, however, for some fees it is two months. The reason for the longer billing delay is explained in the fee-specific descriptions below.

Using a timing example: October transaction volumes are reviewed in November to determine if Non-Transactional Scheme Fees apply. If applicable, scheme fee charges related to October transactions will appear on the November invoice which is available to merchants on the 1st of December.

Types of fees charged under the Non-Transactional Scheme Fee service

The fees charged on the invoice under the Non-Transactional Scheme Fee service are summarized in the following table. Further explanation per fee is provided below.

1. Visa Fixed Acquirer Network Fee (FANF)

The Visa Fixed Acquirer Network Fee (FANF) is a monthly fee that is assessed per merchant Taxpayer ID Number (TIN). The calculation is based on the number of merchant locations, Merchant Category Code (MCC), and monthly total merchant sales volume associated with each Taxpayer ID Number. 

The FANF has three tables on which billing is based.

• Table 1A - Customer Present, High-Volume MCC Merchants
• Table 1B - Customer Present, Other MCC's
• Table 2 - Customer Not Present

Each table has 15 to 20 tiers and each tier has a certain fee allocated. We use the number of locations and the monthly volume of the merchant to assign the correct table and tier. For platform merchants, sub-merchants are seen as separate entities for billing. We evaluate the FANF based on the transactions on each sub-merchant TIN.

2. Visa Acquirer Access Fee (AAF)

The Visa Acquirer Access Fee (AAF) is a quarterly fee based on acquiring volume and total number of merchant locations for a given quarter on acquirer level. We charge this fee to merchants on a quarterly basis, based on the merchant's relative proportion of volume and number of merchant locations. The tiers are assessed on Adyen's acquiring volume, not on a merchant’s volume.

Fees structure:

Card-Present

• USD 1.75 per merchant store for debit and prepaid products
• USD 1.75 per merchant store for credit products

Card-Not-Present
Tiers based on quarterly acquired volume. Practically, the below table implies that Adyen is charged a certain fee tier for CNP traffic, and merchants pay their fair share respectively. Please note the same table applies for Debit, Prepaid and Credit payment volume. The fee is charged to us in USD.

3. Mastercard Merchant Location Fee (MLF)

The Mastercard Merchant Location Fee (MLF) is a monthly fee that Mastercard charges for companies operating in the US. It is assessed based on the number of active merchant locations. 

Rate: USD 1.25 per merchant location.

Exceptions:

• Charitable or Religious organizations (MCC 8398, 8661)
• Monthly merchant sales are under 200 USD

4. Visa System Integrity Fee

This monthly fee consists of two parts, the Visa Excessive Retry Fee and the Visa Data Quality Fee. Visa has clustered the existing decline response codes into four categories for decline code management related to excessive retries, enumeration and fraud attacks. For a detailed categorization of the decline codes please check this article. 

The declines are categorized in the following categories:

• Category 1 - Issuer will never approve: A subset of decline codes that indicates the card is blocked for use or never existed and means there is no circumstance in which the issuer will grant an approval—for example, in the case of a lost or stolen card. Acquirers and merchants are not allowed to retry.
• Category 2 - Issuer cannot approve at this time: A subset of decline codes that indicates the issuer may approve but cannot do so now, perhaps due to a system issue or a lack of funds. Acquirers and merchants are allowed to retry up to 15 times in a 30-day rolling period.
• Category 3 - Issuer cannot approve with these details: A subset of decline codes that indicates the issuer cannot approve based on the details provided, such as an invalid account number, incorrect Card Verification Value (CVV) or CVV2, or incorrect expiration date. Acquirers and merchants are allowed to retry up to 15 times in a 30-day rolling period.
• Category 4 - Generic response codes: While the great majority of declines fall into the above categories, issuers may use some special codes on an ad-hoc basis. Acquirers and merchants are allowed to retry up to 15 times in a 30-day rolling period.

Note: Decline code "14 : Invalid Account Number" is valid for Category 1 for the Excessive Retry Fee, as well as for Category 3 for the Data Quality Fee.

Visa Excessive Retry Fee

Retries on “Category 1” decline codes directly result in Excessive Retry Fees being assessed. For Category 2, 3 and 4 the 16th and consecutive retries in a 30-day rolling period will be assessed the excessive retry fee. For retries, Visa evaluates reattempts of the initial declined transaction using data including, but not limited to; Acquirer, Acquiring Identifier, Card Acceptor ID (CAID) and Token/PAN. In addition, the transaction amount is also evaluated for retries on Category 2, 3 and 4 decline codes. Re-attempts of the initial declined transaction are tracked in sequence. The re-attempt sequence counter resets after an approval response is received.

You can benefit from basic protection against excessive attempts as a result of card testing attacks by fraudsters, or as a result of faulty retry logic. For more information, read this article. 

Visa provides Adyen with reporting on how many excessive retry transactions were made using Adyen Merchant IDs (MIDs) in a certain month. Based on this information, Adyen calculates the charge per merchant/company and passes it on with a one month billing delay.

Adyen's Excessive Retry Prevention Service (ERPS) helps prevent "Category 1" excessive retry fees. Please contact your Adyen point of contact to learn more about this service.

Visa Data Quality Fee

The Data Quality Fee is assessed per-transaction when the number of monthly declines per MID exceeds the regionally defined threshold for Category 3 "Data quality issues" response codes. The fee only applies to the transactions that exceed the monthly threshold. Visa provides Adyen with reporting on how many excessive category 3 decline code transactions were made using Adyen Merchant IDs (MIDs) in a certain month. Based on this information, we calculate the charge per merchant/company and passes it on with a one month billing delay.

5. Mastercard TPE Excessive Authorizations Fee

The Mastercard Transaction Processing Excellence (TPE) Excessive Authorizations Fee is a monthly fee charged for excessive account testing of a single Payment Account Number (PAN) on the same MID within 24 hours and within a 30-day window. Due to Mastercard’s reporting schedule, we charge this fee with a two month delay. The fee will be charged for every authorization attempt after reaching the maximum authorization attempts as per the table below. 

Note: For the US the fee will increase to 0.5 USD per 1 Jan 2025. To avoid being charged this fee, we recommend that you either work together with your Adyen Account Manager on configuring RevenueProtect, or work with your own risk tool provider to ensure that excessive authorization attempts initiated on one card number will be blocked. Read more about how to prevent this fee from being charged using RevenueProtect in this article.

6. Mastercard TPE Merchant Advice Code

The Merchant Advice Code Transaction Processing Excellence program is a monthly fee designed to reduce unnecessary authorization declines. The fee is introduced on Card-Not-Present (CNP) authorization requests declined with a MAC value of 03 or 21, where in the past 30 days a transaction on the same card, at the same merchant, and with the same transaction amount was also declined with a MAC value of 03 or 21. 

Relevant MAC values:

Adyen's Excessive Retry Prevention Service (ERPS) helps prevent this fee. Please contact your Adyen point of contact to learn more about this service.

MAC Response documentation can be seen on Adyen Docs.

7. Mastercard 3D Secure Fee

Mastercard charges a fee for every 3D Secure Authentication request. We receive reports from Mastercard with monthly reporting on authentication requests at Merchant ID (MID) level. We use the MID to divide the authentication charges between merchants in a certain month. The authentication requests using the MID can be made either by Adyen or by third-party 3D Secure service providers. We cannot detect authentications by third-parties, hence we rely on scheme reporting for the data. Currently, this fee is only Non-Transactional for Europe (incl. GB), 3D Secure fees in other regions are still passed on at a transactional level. 

8. Visa 3D Secure Fee

Visa charges a fee for every 3D Secure Authentication request. We receive reports from Visa with monthly reporting on authentication requests at Merchant ID (MID) level. We use the MID to divide the authentication charges between merchants in a certain month. The authentication requests using the MID can be made either by Adyen or by third-party 3D Secure service providers. We cannot detect authentications by third-parties, hence we rely on scheme reporting for the data. Currently, this fee is only Non-Transactional for Europe (incl. GB), 3D Secure fees in other regions are still passed on at a transactional level. 

9. Visa Token Service Fee (VTS)

Visa charges a fee for each instance where Visa Token Service (VTS) is used to facilitate and/or verify an authentication. All tokenized transactions that result in merchant fraud liability protection ('ECI 05') will be billed. If an authentication has been performed with 3DSecure, only the 3DSecure authentication fee will be applicable. Visa provides Adyen with monthly reporting on authentication requests made on Visa Merchant IDs (MIDs) assigned by Adyen. The rate of this fee is currently a fixed fee of 0.02 EUR for both Digital Wallet as well as Network Token transactions.

10. Visa Digital Credential Updater Fee (VDCU)

Visa charges a fee for the first authorization on a Network Token after that token received an update. The merchant will be charged in the following scenario: If a Visa Network Token receives a credential update (PAN, expiry date), the first authorization using this new credential will be charged with the VDCU fee of USD 0.12 (0.09 cents in Canada). If a credential update is received but not used in a transaction, there will be no VDCU fee. We include a 2-month billing delay for North America because we apply a credit from the Visa Account Updater (VAU) to the fees in this region. We decided to do the global billing with a 2-month delay to keep billing consistent. 

11. Visa Stop Payment Service Fees

The Visa Stop Payment Service Fee is a monthly fee charged for the 4th authorization retry and every subsequent authorization retry on the same card after receiving a “Revocation of Auth” refusal reason code R0, R1, or R3. These codes imply that the cardholder has withdrawn their consent for the merchant to charge their account.Category 1 Visa Decline Response Code: “Issuer will not approve”

• R0 : Stop payment order
• R1 : Revocation of authorization order
• R3 : Revocation of all authorization

Rate: EUR 1 per instance for this fee.

12. Mastercard Not Tokenized Credential-on-File (COF) Fee

The fee is charged on not tokenized COF Authorization transactions. A non tokenized credential is when the shopper has to insert the payment details upon checkout. If the card is stored and the shopper just selects it (based on the 4 last digits), this is a form of COF.

The fee is not charged if a non tokenized COF transaction is performed on the FPAN (Raw Card data), when a card tokenization attempt was made but declined within the same calendar month by any acquirer in the Mastercard network. Due to Mastercard’s reporting schedule, we charge this fee with a two month delay. 

Other Non-Transactional fees:

Some Non-Transactional fees have not been migrated to the Non-Transactional Scheme Fee service yet. Generally, this is because the calculation of the fees require manual intervention before adding them to the invoice. These fees will appear at the top of the invoice as invoice correction lines. These fees may be migrated to the Non-Transactional Scheme Fee service in the future.

Visa Marketplace Foreign Retail Fee

Visa charges a quarterly fee for foreign retail transactions to merchants that are registered with Visa as Marketplaces. Currently these scheme fees are charged based on transaction volume reported manually by impacted merchants. This fee will be charged on a transactional level without a billing delay when the merchant provides the correct reporting. Impacted Marketplaces merchants are required to update their integration with Adyen to send in sub-merchant information to benefit from transactional level billing. 

Elo Excessive Retry Fee

The Brazilian domestic card scheme Elo charges a monthly scheme fee on excessive authorization attempts on all decline codes, for any payment transaction using the same card, expiry date, amount and same merchant identification (MID). 

This fee is applicable on the 16th and consecutive retries in the same calendar month on a given card.

Elo Excessive Disputes Fee

The Brazilian domestic card scheme Elo charges a monthly penalty of BRL 100 per fraud dispute exceeding a threshold of 100 monthly disputes with a chargeback rate higher than 1.49%. 

Hipercard Excessive Retry Fee

Hipercard charges the excessive retries program and ASI (Account Status Inquiry) product usage. Payment industry news article. 

Card Present:

• BRL 1.85 per transaction retry for same account number after 8 issuer refusals on the same day within the same month.
• ASI Transaction: BRL 0.15 per ASI transaction retry after issuer refusal for same account number on the same day within the same month.
• Irreversible transaction retry: 0.03% of transaction amount being BRL 0.15 and BRL 0.80 the minimum and maximum cap for the same account number on the same day within the same month after the given response code.

Card Not Present:

• BRL 1.85 per transaction retry for same account number after 8 issuer refusals within the same month.
• ASI Transaction: BRL 0.15 per ASI transaction retry after issuer refusal for same account number within the same month.
• Irreversible transaction retry: 0.03% of transaction amount being BRL 0.15 and BRL 0.80 the minimum and maximum cap for the same account number within the same month after the given response code.

Note: irreversible transactions are categorized under ABECS (Associação Brasileira das Empresas de Cartões de Crédito e Serviços - Brazilian) Normativo 21.