Merchant Services
A Merchant's Guide to (Minimizing) Fees

A Merchant's Guide to (Minimizing) Fees

Let's face it: nobody likes fees. But the reality is that payment processing involves a sometimes bewildering array of fees and charges. The good news? By following some basic best practices, merchants can minimize or avoid many of these fees and enjoy the best rates possible.

As an example, consider these two commonly assessed fees - and ways you can address them:

Transaction Integrity Fee - The Visa Transaction Integrity Fee is a $0.10 fee assessed on Visa Debit and Visa Prepaid card transactions that fail or do not request Custom Payment Service (CPS) qualification. Or in other words, transactions that are submitted without the safeguards (Account Verification Service) that Visa requires for proper qualification. The fee most commonly impacts businesses that process higher risk card-not-present transactions.

Reasons the Fee Is Assessed:

    • Address verification is not requested for manually entered transactions or card-not-present transactions
    • E-commerce transactions do not include the order number or customer service number
    • Transactions are not settled in a timely fashion (typically 2 days)
    • Additional data is not provided for hotel/lodging transactions

Solutions for Avoiding the Fee:

    • Request address verification on all key-entered and card-not-present transactions
    • Make sure the shopping cart or payment gateway software can provide the order number and customer service number
    • Settle (batch out) your terminal every day
    • Lodging merchants should include the check-in/check-out dates and folio numbers

Misuse of Authorization Fee - Visa assesses this fee for what it refers to as "ghost authorizations" - authorizations that are not either settled or reversed within certain timeframes. This occurs when merchants attempt to validate cardholder information by submitting an authorization ($.05, $.10 or $1.00) that is not a part of the actual transaction authorization.

Reason the Fee Is Assessed:

    • Authorizations are not followed by a matching clearing transaction (or in the case of a cancelled or timed out authorization, not properly reversed)

Solutions for Avoiding the Fee:

    • Reverse card-present authorizations that have been submitted in error and/or cardholder cancelled within 24 hours
    • Process full or partial authorization reversals for card-not-present transactions within 72 hours
    • Ensure that settlement occurs within 10 days of authorization (20 days for Travel and Entertainment segment merchants)

Keeping a handle on expenses is smart business - and properly managing card processing costs is no exception. Be sure to follow best practices for holding the line on your payment processing.


PNC is a registered mark of The PNC Financial Services Group, Inc.("PNC")

Visa is a registered trademark of Visa International Service Association and used under license.

This Merchant Business Insights e-Newsletter is designed to provide useful and practical information for merchants accepting card transactions. It is not intended to be legal, tax, accounting or financial advice, nor should it be substituted for a full and regular review of the Association Rules and any changes thereto. Internet sites provided in this e-Newsletter are provided as a convenience to our readers. While PNC Merchant Services endeavors to provide resources that are reputable and safe, we are not responsible for the information, products, or services obtained on such sites.