ISA Fee: Definition & What it Means for Merchants

As an eCommerce merchant, you might be dealing with an unexplained “ISA fee” charge on your monthly account statement. If you’re wondering what you did to incur an ISA fee, then read on, as we’ll help you understand what an ISA fee is and why it appears on your merchant bank statement.

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What is an ISA fee?

The Visa International Service Assessment (ISA) fee is a processing fee charged to merchants by Visa when customers pay with credit or debit cards issued by banks outside the United States. This fee applies to brick-and-mortar stores and e-commerce stores alike. What’s more, ISA fees still apply even when customers’ issuing banks and payment processors are based outside the United States but have branches within the United States. Other card brands, such as MasterCard, Discover, and American Express, also charge similar international transaction fees under different names. In addition to the ISA fee, eCommerce merchants might also encounter a Visa International Acquirer Fee (IAF) from Visa on their statements.

What is the difference between ISA and IAF (International Acquirer) fees?

There isn’t much difference between the two, as it’s a case of semantics across card issuers. The IAF is charged under the same premise as the ISA, but Visa charges both as separate fees stacked upon each other on your debit card statement. That means that whenever you’re billed an ISA fee, just be aware that the IAF is attached to it. And if you add them up with a potential currency swap fee, then you’re looking at up to 1.65% of the transaction fee in additional costs.

	Description	Typical rate	Notes
ISA (International Service Assessment)	Charged when a card issued outside the U.S. is used in a U.S.-acquired transaction.	Around 0.80% if settled in U.S. dollars, around 1.20% when settled in a foreign currency.	Applies to both online and in-store payments.
IAF (International Acquirer Fee)	Also charged under the same circumstances as ISA, as part of international card-processing assessments.	Flat 0.45% of the transaction value, though higher in some high-risk merchant category codes.	Stacks with ISA, meaning merchants typically pay both when they accept such cards.

How are ISA fees calculated?

ISA (International Service Assessment) fees are calculated as a percentage of each transaction involving a foreign-issued Visa card processed by a U.S.-based merchant acquirer. Here’s a clear breakdown of how the calculation works: 1. When it applies

The fee applies when a customer uses a Visa card issued outside the U.S. to pay a U.S. merchant.
It applies to both online and in-person transactions.

2. The calculation formula The ISA fee is calculated as: ISA Fee = Transaction Amount × Applicable ISA Rate 3. Typical ISA fee rates

0.80% of the transaction amount when the transaction is settled in U.S. dollars.
1.20% of the transaction amount when the transaction is settled in a foreign currency.

4. Example Let’s say a customer from the U.K. makes a $200 purchase on a U.S. website, paying in U.S. dollars.

ISA fee = $200 × 0.80% = $1.60

If the same transaction were processed in British pounds instead,

ISA fee = $200 × 1.20% = $2.40

5. Combined with other fees In most cases, Visa also charges the International Acquirer Fee (IAF) on top of the ISA. So the total cost for a cross-border Visa transaction could be: Total = Transaction Amount × (ISA Rate + IAF Rate) For example:

$200 × (0.80% + 0.45%) = $2.50 total fee

Who is responsible for paying the ISA fees?

Simply put, the merchant is, and there are several reasons for this. Many business owners are not happy with the idea of being responsible for handling extra charges incurred from processing international payments. To be fair, it sounds logical for customers to shoulder the additional costs attached to processing their payments. However, as Visa has no means of billing the cardholder directly for the additional costs, they bill merchant processors instead. And in turn, merchant processors have to pass the costs down to merchants. And this is why ISA fees appear on your monthly processing statement.

How often are ISA fees charged?

ISA fees are charged when a customer makes a payment using a card issued by a non-U.S. bank. This goes to say that as an eCommerce merchant, you will be billed by Visa every time you receive a payment from a foreign bank or card, whether online or in a store. For example, let’s say your customer is an Australian tourist with a travel card issued in his home country. When he pays you using his card, you’ll be charged the ISA fee. Or maybe you operate an online store and a customer from Brazil purchases a product using his country’s card to be delivered to a U.S. address – you will be charged an ISA fee. It’s simple – you get charged with foreign transaction fees each time you receive payment from a foreign card.

How do I identify ISA fees on my account statement?

You may notice the ISA fee on your merchant account card processing statement. It only shows up on your statement in the month that you accepted payment from a foreign card. And how the ISA fee is presented on your statement depends on your pricing plan. If you’re on a flat-rate pricing model, you probably won’t find a breakdown containing your ISA fees. Instead, you will find ISA fees bundled into your flat rate. So, charges labeled as “misc fees” or “other fees” are likely to have your ISA fees bundled in. If you ever notice a significant fee, contact your merchant processor to gain clarity on what those charges are about. However, if you’re on a tiered pricing model, each transaction is likely to be broken down with fees for each item listed. So, you should find “ISA fee” or something to that effect on your account statement.

What does the ISA fee cost on average?

As we previously stated, the costs (and name tags) of ISA fees vary among card-issuing companies. Here are a few of the most popular charges eCommerce merchants might come across.

	Fee type	Typical rate (USD settlement)	Typical rate (foreign currency settlement)	Combined effective cost to merchant	Notes
Visa	International Service Assessment (ISA) + International Acquirer Fee (IAF)	0.80% + 0.45% = 1.25%	1.20% + 0.45% = 1.65%	1.25–1.65%	Applies when the card is issued outside the U.S. and processed by a U.S. acquirer.
Mastercard	Cross-Border Fee + Acquirer Program Support Fee	0.40% + 0.55% = 0.95%	0.40% + 0.80% (for some foreign settlements) = 1.20%	0.95–1.20%	Fees vary slightly by region and acquirer, but Mastercard’s average is generally lower than Visa’s.
Discover	International Processing Fee + International Service Fee	0.55% + 0.80% = 1.35%	0.55% + 0.80% = 1.35%	1.35%	Discover combines both fees, and they’re typically applied together on every cross-border transaction.
American Express	Cross-Border Fee (variable)	Starts at 0.40%	Up to 1.10% depending on currency and merchant category	0.40–1.10%	AmEx sets rates individually per merchant, so fees can fluctuate by volume, industry, and location.

Visa credit card ISA fees

Visa charges merchants two fees per foreign card transaction:

International Service Assessment fee (ISA): 0.80% for foreign transactions that don’t involve a currency exchange, and 1.20% for those involving interchange.
International Acquirer Fee (IAF): 0.45%.

Adding these together gives merchants 1.25% and 1.65% for non-interchange and interchange transactions, respectively.

MasterCard ISA fees

MasterCard also charges two fees for international transactions:

International cross-border fee: (which is similar to the Visa ISA fee) – 0.40%
Acquired Program Support – 0.55%

The cross-border fee is charged alongside the Acquired Program Support fee whenever a customer pays in US dollars but uses a MasterCard that is issued by a non-US bank.

Discover ISA fees

This card brand also charges two fees for international transactions:

International Processing fee: 0.55%. This applies in the same circumstances as the ISA fee.
International Service fee – 0.80%

Discover also combines both fees. That means you’ll be paying 1.35% for each foreign transaction your business completes.

American Express ISA fees

American Express fees vary but as a guide, they charge at least 0.40% for international transactions. The best thing to do is to contact them or your merchant service provider to understand your exact AmEx fees as shown on your monthly credit card processing statement.

How to reduce or avoid ISA fees

As ISA fees are charged for processing international transactions, the no-brainer way to reduce ISA fees is to stop accepting international payments. However, this doesn’t seem like a good idea considering the potential drop in sales you might experience. The second option is to change your merchant pricing model to interchange plus, which breaks down each transaction and only charges you the “minimum rate” per transaction. You could also consider opening a branch of your business in countries where you have a substantial customer base. Or, you could cushion the effects of these fees with a 1 – 2% price increase, depending on your customers’ receptiveness.

Choose a reputable merchant account provider to help you with ISA fees

You may not like the idea of these extra costs on your account statements, but ISA fees are here to stay. In fact, ISA and other international transaction fees are expected to rise, considering the upward trend in tourism, immigration, and e-commerce. Your best bet is to stick to a supportive merchant account provider that is always available and transparent enough to answer your questions honestly.

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