Dues and Assessments | B2B Finance Glossary

Oct 20, 2023 by Zazil Martinez

What Are Dues and Assessments?

When it comes to card processing, dues and assessments make up the second largest cost that occurs in this system. Dues and assessments are about 10% to 15% of the total card processing cost.

About 30 different assessments and dues fees are paid directly to the card networks to cover operating expenses and the costs of managing the networks themselves. It’s important to note that all credit card processors are contingent upon the same assessment fees and are passed on to merchants who must cover the cost. However, some acquirers mark up some of these fees.

In this system, “dues” refers to grouping all the different miscellaneous fees the card networks charge. These fees are primarily per-item transaction fees charged alongside each authorization and settlement of a sale. It’s important to note that some dues fees are charged on every transaction, while others are charged based on the particular characteristics of certain transactions.

“Assessments,” on the other hand, are the flat-rate percentages that the card networks charge against total gross monthly sales, and they usually range from 0.12% to 0.14%.

Similarly to interchange fees, assessments and dues cannot be negotiated, but there are a few areas where these fees can be optimized.


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

Acquirer fees are another fee charged by the payment processor or merchant acquirer, also known as the acquirer. This organization handles authorization, reporting, and settlement. These fees are directly paid to the merchant processor for their work.

Acquirer fees are charged in addition to interchange fees, dues, and assessments, totaling about 5% to 20% of the card processing cost. However, small merchants might pay as much as 50% of the total cost of card processing. Additionally, it can be challenging to understand how acquirer fees are bundled on statements or when they are presented as tiered rates. Here are a few examples of some standard acquirer fees that might appear on your statement:

  • Terminal fees
  • Monthly minimum fees
  • Gateway fees
  • Statement fees
  • Settlement fees
  • Processing fees
  • Authorization fees
  • Account fees
  • Reporting fees
  • Service fees

Unlike dues and assessments, acquirer fees are negotiable. If you and your finance team can review and understand your monthly statements before negotiating with your acquirer, you can save meaningful costs to your business.


What is the Difference Between Assessments and Interchange Fees?

Interchange fees are also known as “swipe fees,” they are the fees that a merchant must pay every time a retailer processes a credit or debit card payment. These fees are the single most significant expense for card processing that merchants will ever have to pay, totaling as much as 70% to 80% of the total cost. They are primarily designed to pay the card issuers for their work in accepting, processing, and authorizing card transactions.

All the interchange a merchant pays goes to the bank issuing the card. Interchange fees typically consist of a percentage of each transaction and a flat per transaction fee (e.g., 1.51% + $0.10). For card issuers, interchange revenue pays for the cost of money (the bank provides an interest-free loan to a person’s credit limit if the card balance is paid in total), rewards programs, internal costs, including fraud, and profit.