Assessment Fee Definition

An assessment fee is a type of fee charged by card networks, such as Visa, Mastercard, Discover, or American Express, to merchants for each transaction conducted using their respective payment network. It is one of the components of the overall payment processing fee structure and is distinct from interchange fees, which are charged by card-issuing banks to merchant acquiring banks.

Card networks provide the infrastructure and payment processing services that enable transactions to be authorized and processed between the cardholder's bank (issuing bank) and the merchant's bank (acquiring bank). To cover the operational costs and development of their payment networks, card networks impose assessment fees on acquiring banks or payment processors for facilitating these transactions.

The assessment fee is typically a fixed percentage of the transaction amount and is applied to all transactions that pass through the network, regardless of the specific cards or banks involved in the transaction.

While interchange fees are set by the card-issuing banks and may vary based on factors such as the type of card, the merchant's industry, and the transaction type, assessment fees are uniform across all transactions processed through the card network. These fees are specified in the network's fee schedules and are subject to change at the discretion of the card network.

Assessment fees are one of the costs that merchants incur when accepting card payments, and they are usually passed on by payment processors or acquiring banks to the merchants. The fees are included in the overall payment processing fees that merchants pay for the convenience of accepting card payments.

For merchants, understanding assessment fees is important for evaluating the total cost of accepting card payments and for negotiating favorable processing agreements with acquiring banks or payment service providers.