Mar. 9, 2012
Accusing Visa Inc. of a “lack of regard” for its members, the Electronic Transactions Association merchant-acquiring trade group sent a letter to the card network March 7 asking that it delay implementation of a new fixed fee until acquirers have time to reprogram their back offices and make other adjustments.
The 450-member group sent the letter to chief executive Joseph Saunders and three other Visa executives “to express our serious concerns and the challenges to our members regarding the implementation” of Visa’s new Fixed Acquirer Network Fee, or FANF. The fee is one part of Visa’s effort to protect its volumes in the wake of the Durbin Amendment, whose transaction-routing provisions threaten to divert debit card volume to Visa competitors. Details of the new fee started emerging last month, and acquirers are trying to determine whether it will cause their costs to rise or fall. Observers expect that no matter what, acquirers will pass the expense on to their merchant clients.
The ETA says Visa hasn’t yet divulged enough details or given them enough time to reprogram their systems to process the new fee, which becomes effective April 1, though Visa won’t actually start collecting it until July. The FANF is only one component of a new Visa pricing plan that includes a reduction in some variable costs.
“What is difficult for our members to digest with respect to the FANF is Visa’s lack of regard for the ETA community in the FANF implementation-planning and information release,” the letter says in reference to a Feb. 9 Visa bulletin outlining the fee. “We remain, however, interested in working with you to achieve a more efficient implementation process and to provide suggestions on how to best implement this, and future, Visa releases.”
The ETA cited several problems with the fee. First, the timing between the announcement and implementation “is simply too aggressive given the impact to processes and systems.” The letter notes that only 36 business days separate the bulletin’s issuance and the effective date and that as of March 7, acquirers were still awaiting more information from Visa. “Secondly, the FANF is a new construct, not simply a revision of an existing fee, and as such requires new system components, processes, and functionality to be created,” the letter says, adding that “the unusual complexity of this directive increases the time pressure of such a small implementation window.”
“Finally, the combination of these factors places enormous stress on all parties in the payments service stream and increases the risk of unintended consequences in implementation for all stakeholders in the payments ecosystem.”
The letter asks Visa to postpone FANF’s implementation to 90 days after the network gives “implementing guidance … and complete information to merchant acquirers, processors, and merchants.”
A Visa spokesperson tells Digital Transactions News that Visa will be issuing a comment soon.
The letter was signed by 17 ETA members, including executives from some of the nation’s largest merchant acquirers and independent sales organizations, including Wells Fargo & Co., U.S. Bancorp’s Elavon subsidiary, and Moneris Solutions. Signatories included some but not all of the ETA’s board members.
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