What Is An Assessment Fee?

There are a number of fees that determine your total credit card processing costs. The answer to what is an assessment fee is related to the charge against your monthly sales volume. Visa, MasterCard and Discover each have set a small, flat-rate percentage that is charged against the total of your monthly sales processed with a credit or debit card bearing their logo. Assessments are paid directly to the card associations and are their primary source of operating income.

All credit card processors are subject to the same assessment fees. They pass this fee on to merchants at cost and may appear on your monthly credit card statement as a separate line item, listed as “Dues and Assessments”, or individually as “Dues” or “Assessments” Other times, processors will bundle this fee with other charges, such as Interchange, to come up with a single processing rate. At the time of this writing:

• Visa charges an assessment fee of 0.11% or 11 basis points
• Discover charges an assessment fee of 0.0925% or 9.25 basis points
• MasterCard charges an assessment fee 0.095% or 9.5 basis points

When understanding what is an assessment fee, should be taken into consideration the fact that major credit card associations review their fees twice a year. Be sure to check your credit card processing statement for any increases to your Assessment fee.

Difference Between Assessment Fess and Interchange Fees

Assessment fees are not to be confused with Interchange fees. The Interchange fee is a percentage set by the credit card association that is deducted from each credit card transaction and a portion of this fee goes to the issuing bank. An Assessment fee is charged on the total of your monthly sales for each credit card brand and is paid entirely to the credit card associations. The combination of these fees are sometimes referred to as a “swipe fee”. This term describes these fees well. These are the fees you pay to the credit card associations to be able to accept and process their credit cards at your place of business. One more fact worth mentioning is that Interchange Fees and Assessments are the same for all merchants, regardless of the size of the merchant or the amount of credit card volume processed.

The more payment options you can offer your customers, the better your chances are of making a sale. In fact, reports show that shoppers may spend as much as 20% more if they have the option to use their credit card at checkout. Though credit card processing fees can add up, these costs will be offset by the benefits of accepting credit cards in payment for your goods or services. Knowing what is an assessment fee will make your credit card processing Assessment fee a pretty smart business investment.