What Merchants Need to Know About Dues and Assessments

Table of Contents

1. What Are Dues and Assessment Fees?
2. What is the Difference Between a Fee and an Assessment?
3. What is the Difference Between Acquirer Fees and Dues and Assessments?
4. What is the Difference Between Assessments and Interchange Fees?
5. Why Understanding Dues, Assessments, and Acquirer Fees Matters

Key Takeaways

• Dues & Assessments: Non-negotiable fees from card networks, with dues based on transactions and assessments on monthly sales.
• Acquirer Fees: Charged by payment processors for services, acquirer fees are negotiable, unlike dues and assessments.
• Interchange Fees: Also non-negotiable, these fees go directly to the card-issuing bank for each transaction.
• Cost Management: Understanding these fees helps merchants optimize payment setup, reducing expenses and protecting margins.
• Explore Automation: Finance automation can further streamline costs and enhance financial control.

With dues and assessments making up a large portion of card processing costs, understanding these fees is essential for merchants looking to manage expenses effectively. This guide breaks down dues and assessments, explains how they differ from other fees like acquirer and interchange fees, and offers strategies to help merchants optimize their payment setup.

What Are Dues and Assessment Fees?

Dues, assessments, and other fees contribute significantly to monthly costs and are mostly non-negotiable. This guide will break down each fee type and highlight strategies for optimizing costs.

What is the Difference Between a Fee and an Assessment?

In the card processing ecosystem, dues and assessments are fees that card networks charge to cover operating expenses and maintain the network infrastructure. These fees are consistent across all credit card processors and passed on to merchants as non-negotiable costs—though some processors may add markups.

Dues: Transaction-Based Fees

“Dues” refer to various per-item fees charged by card networks for each transaction’s authorization and settlement. Some dues apply to every transaction, while others are specific to certain transaction types or characteristics.

Assessments: Flat-Rate Charges on Sales

“Assessments” are flat-rate fees that card networks charge as a percentage of gross monthly sales, usually between 0.12% and 0.14%. Like dues, assessments are standard across all credit card processors.

While dues and assessments cannot be negotiated, optimizing your card processing setup may help reduce costs in other areas.

What is the Difference Between Acquirer Fees and Dues and Assessments?

Acquirer fees are separate from dues and assessments and are charged by the payment processor (or “acquirer”) for handling transaction authorization, reporting, and settlement services. Acquirer fees are often bundled or presented in tiered rates, which can make it challenging to understand individual charges.

Common acquirer fees include:

• Terminal fees
• Monthly minimum fees
• Gateway fees
• Settlement fees
• Processing fees
• Authorization fees
• Reporting fees

Key Point: Unlike dues and assessments, acquirer fees are negotiable. Reviewing your monthly statements and negotiating with your acquirer can help reduce these costs, improving business financial management.

What is the Difference Between Assessments and Interchange Fees?

Interchange fees, commonly called “swipe fees,” are charges merchants pay every time a credit or debit card transaction is processed. Interchange fees are non-negotiable and go directly to the card-issuing bank, compensating it for processing, accepting, and authorizing transactions.

Interchange fees generally include a percentage of each transaction and a fixed per-transaction fee (e.g., 1.51% + $0.10). These fees cover the issuing bank’s costs, including rewards programs, fraud management, and profits.

Why Understanding Dues, Assessments, and Acquirer Fees Matters

The complex structure of dues, assessments, acquirer fees, and interchange fees can drive up card processing costs for businesses. Knowing what each fee covers and where negotiation is possible allows merchants to manage better and optimize their expenses. Regularly reviewing statements, understanding fee structures, and negotiating acquirer fees with your payment processor can reduce costs and protect profit margins.

Dues, assessments, acquirer fees, and interchange fees contribute significantly to merchants’ card processing costs. By understanding each fee type and identifying areas where negotiation or optimization is possible, merchants can take control of their processing expenses. Effectively managing these fees helps businesses reduce costs, protect profit margins, and make more informed decisions about their payment processing setup.

Understanding dues and assessments is just one step toward managing payment processing costs. To further streamline your finance automation operations, explore our guide on Why Finance Automation is Good for Your Job and discover how automation can make expense management easier and more effective.