Network access and brand usage fee is a kind of implicit social cost for using the network to obtain services. It makes the payment methodology more fair, so that ordinary user can obtain better service at lower cost, which also makes the competition fairer in business sector.

Network Access and Brand Usage Fee was formerly called “Red Packet”, which was granted by Tencent to its QQ users. After the trial of network access and brand usage fee in China Unicom, State Grid Corporation of China etc., it has become one of important pricing models in the Internet service market. A lot of scholars have proposed that this model is not only suitable for current business practices but also a good method to solve the problems of implicit social cost and unfair competition.

The purpose of network access and brand usage fee is to provide a better service for users, so that user can receive more value from using the services. In fact, by paying network access and brand usage fee when users use certain services or websites, they will better understand the value of the services they use. For a long time, the principle of “user pays” is important to an internet business process, which also makes development easier and fairer.

In addition, nowadays social network service has already become an indispensable part of people’s daily life. In China there are nearly 100 million QQ users and 300 million Wechat users every day, and there are more than 400 million active social media accounts in total. Its impact on people’s daily life is getting stronger and stronger.

The existence of network access and brand usage fee can product and distribute value more fairly and it contributes to fairness between companies and government as well. However, for this model to be more widely accepted, the MOFCOM (Ministry of Commerce) should take some measures.

Network access and brand usage fee stimulates companies’ innovation and creativity. It also provides a better environment for user’s dynamic regulation of network services, which can increase their willingness to pay and thus further reduce implicit social cost. Perhaps we could adopt a series of measures such as to improve the brand management. For example, we could adopt a feature like “zero payment” in QQ and Wechat, so that when consumer use certain services or pay for their individual products, they can enjoy free internet access.

Besides, in network business process, only by asking consumers to accept explicit social costs will the companies be able to reduce their implicit social cost. Therefore, MOFCOM should consider a few possible measures such as help companies to ask for explicit social costs from consumers and give them more payment options.

Hence, there needs a third party’s verification because it is difficult for users to know how much they really spend on using the internet. In the end, it is better to be regulated by a third party or association that can keep things fair and transparent for both parties.

The core of network access and brand usage fee is to reduce implicit social costs. At present, there are still many difficulties in making this model popular. For example, it’s hard for users to understand how much they really spend on using the internet.

First, it is necessary to enhance users’ awareness of network access and brand usage fee. For example, we could adopt double charging system for Internet services or improving “zero payment” feature for certain services that allow free internet access when consumers use them. However, this model needs to be regulated by third party or association, which can ensure transparency for both parties.

Debit card processing fees are a critical component of any credit card processing company’s pricing structure. Debit cards make up an increasingly greater percentage of total transactions, and many payment processing companies have responded to this trend by offering debit card processing as a separate service or changing their pricing to accommodate these transactions. Debit cards are the preferred payment type for consumers and merchants alike because Debit processing fees tend to be lower than traditional credit card processing fees, and Debit cards offer consumers the convenience of not having to carry cash.

Debit cards work much like a standard credit card except that instead of requiring a line of credit established by the bank, they draw funds directly from your checking account when you make a transaction. Debit cards, therefore, tend to be very useful for immediate transactions and transactions where you do not want to put the item on your credit card. But they are also more complicated than standard credit cards in terms of processing fees because Debit cards can be processed in two different ways depending on what type of Debit card is being used.

Debit cards that require PINs are processed like standard credit cards where the business swipes the Debit card through a point of sale (POS) terminal. Debit cards that do not require PINs cannot be processed in this way because Debit cards without PINs draw funds directly from your checking account when you make a purchase by simply entering your Debit card number and a Personal Identification Number (PIN).

Debit cards that do not require PINs can be swiped as Debit cards or processed as Credit cards. In the latter case, the Debit card issuer draws funds from your checking account and places an authorization hold much like a standard credit card processing transaction except that it does not bill you for the Debit card transaction.

Debit cards are also processed in a similar fashion to credit cards when they are key-entered or e-commerce Debit cards where the Debit card number is entered into the appropriate fields on the merchant’s website and an online Debit purchase is made with no physical Debit card swiped. Debit card processing fees with Debit cards that do not require PIN entry are highest when Debit card transactions are key-entered or e-commerce Debit cards because Debit cards without PINs cannot be processed in the same way Debit cards with PINs can.

Debit card issuers like Visa and MasterCard set their own rates for Debit card transactions. Debit processing fees vary from Debit issuer to Debit issuer and Debit transaction type to Debit transaction type so it is best for a merchant to compare Debit processing rates from numerous Debit issuers before making a decision on which Debit service to use.

A Guide To The Different Types of Debit Card Debit cards can be processed in two different ways: Debit Cards that Require PINs Debit Cards that do not require PINs Debit Cards that require PINs are processed in much the same way as a standard credit card transaction. Debit transactions using this methodology draw funds from your checking account and place an authorization hold much like a standard credit card transaction.

Debit Cards without PINs Debit Card issuers are able to process Debit cards without requiring a Personal Identification Number (PIN) in two different ways: Debit Cards that require the Debit Card Number and the Expiration Date Debit cards that do not require the Debit Card number or expiration date Payment processing companies like Debit Card Solutions process Debit cards in the Debit cards that do not require the Debit card number or expiration date way.

When a Debit card is processed in this way, Debit transactions place an authorization hold much like a standard credit card transaction would but they do not bill you for Debit processing fees . It is important to note Debit card processing fees for Debit cards that do not require PIN entry are higher than Debit card processing fees for Debit cards with PINs because Debit card issuers have to pay a percentage of each Debit transaction to the payment processor.

A Credit card surcharge is an additional fee charged, usually by a merchant, to the customer of the company for utilizing their Credit Card. Credit Card Surcharges are often levied on the customer because Credit Card companies charge higher fees (about 3%) than debit cards. The Merchant has to pay this fee to Credit Card companies whenever they accept Credit Card payments. Credit card surcharges are typically non-negotiable, meaning that they are not subject to negotiation or bargaining with the merchant.

When Did Credit Card Surcharges Start?

Credit Card surcharges have been around for a while now, although it has previously not been as prominent. Credit card companies charge the merchants higher fees for Credit Card transactions. Credit card surcharge was brought to the limelight when companies like American Airlines started charging Credit Card users more on every Credit Card transaction. This caused a big stir amongst consumers, and many Credit card companies were criticized for not taking necessary actions against this unfair practice of Credit cards companies.

Is A Credit Card Surcharge Legal?

Prior to April 2016 Credit card surcharges were not legal in the USA. However, Credit Card companies began charging higher fees for Credit Card transactions and this encouraged merchants to charge Credit card users extra so that they can get a share of the Credit Card fee. Some Credit card companies urged regulators to “take action” and pass a Credit Card surcharge ban. Finally, in April 2016 the Credit Card Surcharge Ban was put into effect and Credit card surcharges were made illegal in most states. However, certain merchants can still charge Credit card users an extra fee for Credit Card transactions.

How Much Is The Credit Card Surcharge?

The Credit Card surcharge amount typically varies according to the Credit card company. As an example, American Airlines charged $6 Credit Card Surcharge when Credit card payments were made. It was later reduced to $4 when multiple Credit card companies approached US regulators about Credit card surcharges.

Which States Allow Credit Card Surcharges?

As mentioned before, Credit card surcharges were made illegal in April 2016. However, Credit Card surcharge laws vary from state to state and Credit card companies often differ on the Credit Card Surcharge amount they charge. Credit card companies are allowed to charge Credit card users extra depending upon the Credit Card Surcharge laws in their respective states. Credit card surcharge laws are different for Credit Card companies that have their headquarters in the USA and Credit Card companies that don’t.

What Credit Card Surcharge Laws Apply To Foreign Credit Card Companies?

Credit card surcharge laws are not applicable to Credit cards implemented by Foreign Credit card companies. As an example, Credit Cards issued by Credit card companies like JCB and Diners Club Credit cards are not subject to Credit Card Surcharge laws in the USA. However, Credit Cards issued by Credit card companies that have their headquarters in the USA are subject to Credit Card surcharge laws.

Do Credit Card Companies Charge Foreign Customers?

Yes! Even Credit cards issued by Credit card companies that have their headquarters outside the USA are subject to Credit Card Surcharge laws. Credit card user who wish to avoid Credit Card surcharges have a few options:

• Credit cards issued by Credit card companies that have their headquarters in the USA
• Credit cards issued by Credit card companies that either don’t charge customers a Credit Card Surcharge or Credit card surcharges are much lower than Credit cards issued by Credit card companies that have their headquarters in the USA.
• Credit cards issued by Credit card companies that don’t charge Credit Card Surcharge at all. For example, Credit Cards issued by Visa or MasterCard are not subject to Credit Card surcharge laws in the USA, because Credit card companies like Visa and Mastercard have their headquarters outside the USA. These Credit cards can be used to avoid Credit Card Surcharges in the United States of America.
• Credit cards issued by Credit card companies that allow Credit card users to opt out of Credit Card surcharges. For example, Credit cards issued by Credit card companies like American Express allow Credit card users to opt out of Credit Card surcharges. Credit cards issued by Credit card companies that allow Credit card users to opt out of Credit Card Surcharges enable Credit card users to avoid Credit Card surcharges easily.

Credit Cards issued by Foreign Credit Card companies are not subject to Credit Card Surcharge laws. Credit cards issued by Credit card companies that have their headquarters outside the USA are not subject to Credit Card Surcharge laws in most states of America.

Credit cards issued by Credit card companies that either don’t charge Credit Card surcharges or Credit card surcharges are much lower than Credit cards issued by Credit card companies that have their headquarters in America enable Credit card users to avoid Credit Card Surcharges easily. Credit cards issued by Credit card companies that allow Credit card users to opt out of Credit Card surcharges make opting out of Credit Card Surcharges easy for Credit card users.

The Visa Fixed Acquirer Network Fee (FANF) is a non-swipe fee that is paid by the merchant to their acquiring bank for each debit card transaction, whether the purchase results in a Visa or Maestro payment.

WHAT IS THE ROLE OF THE FANF? 

The Fixed Acquirer Network Fee (FANF) is a payment made by the retailer’s bank (the Acquirer) to Visa’s Member banks (Member banks), in respect of each debit card transaction. At present, British retailers wishing to accept Visa cards must pay an Fixed Acquirer Network Fee (FANF) to their acquiring bank who then pays this fee on to Visa.

The main consequence of the FANF is that it makes Visa Debit cards more expensive to accept for retailers. The Fixed Acquirer Network Fee (FANF) has been called the ‘secret cost of accepting debit cards’ by Which? magazine, and can add up to 10p on a customer’s bill if they use their debit card. In contrast, credit cards tend to be cheaper because the fees are shared by retailers and Visa.

The Visa Fixed Acquirer Network Fee (FANF) is set by the network (i.e. Visa) and not individual banks or merchants, which means that it is the same regardless of the retailer’s bank and merchant services provider (MSP). As a result, some larger retailers have chosen to negotiate special rates with their acquirers and brokers, to obtain a ‘FANF discount’.

The FANF was established in 1984 and was originally set at 3p. The fee is reviewed every 4 years by Visa Europe (the network) and the amount of the fee is normally changed during such reviews. In 2010 an increase from 5p to 8p was introduced, and in 2014 an increase from 8p to 10p was introduced.

How Does The Fixed Acquirer Network Fee (FANF) Operate?

When a retailer accepts a Visa Debit card, the customer’s bank is charged for that transaction by their own bank (the Issuing Bank) who in turn charges the retailer’s bank (the Acquirer). The Acquirer, who is effectively the retailer’s bank, then passes on this payment to Visa and receives a Fixed Acquirer Network Fee (FANF) reimbursement from Visa. Because these fees are passed on to retailers indirectly, they therefore convert into higher prices for consumers – which is where the ‘secret cost of accepting debit cards’ axe comes in.

Under Section 75 of the Consumer Credit Act, the bank is jointly liable to its customers if something goes wrong on a purchase of this kind. For example, if there was a problem with the goods or service which you have bought using your debit card or alternatively, an item that you have ordered has not turned up. As well as protecting consumers from being ripped off by unscrupulous merchants, it is a useful back-up for consumers who feel unable to complain directly about a transaction which has gone wrong.

Fees like the FANF make credit cards more attractive to retailers by making them cheaper than debit cards. Research has shown that Credit Cards are used far more often than Debit Cards by all types of shoppers. Credit Card spend is worth over five times more to retailers than debit card spend on average.

Since the introduction of new rules about unfair fees in 2012, some types of merchant (but not all) are legally entitled to charge customers who do not wish to pay with credit or debit cards an alternative flat-rate fee. However, this ‘surcharge’ must be clearly listed before the customer completes payment, and cannot reflect the cost to the merchant of accepting cards.

Also, this applies only to businesses that are not subject to UK-wide price controls (so they’re mainly hotels and car rental firms). A number of high street retailers have voluntarily opted out of these surcharge rules in favour of offering ‘cash discounts’, which like the flat-rate fee are essentially an incentive to pay by cash rather than card.

Although if you are hit with surcharges, there are some steps you can take to reclaim them from your bank or building society under Section 75. Always remember, if something goes wrong with a purchase, you have six years to take a complaint to the Financial Ombudsman Service (FOS) and Section 75 is one of your main weapons.