NABU, FANF, APF, ERR — your statement is full of codes that look made up. Here's what every one of them actually means, who pockets the money, and whether you're getting fleeced.
Every fee on a typical merchant processing statement — what it is, who actually keeps the money, and when a specific number should trigger a renegotiation call.
| Code | Full Name | What it is | Charged by | Typical amount | Negotiable? | Benchmark |
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Before you can evaluate individual fee lines, you need to know which pricing model you're on. The same $50 transaction can cost you $1.10 on interchange-plus or $1.75 on flat-rate — same card, same terminal, different contract.
Stripe (2.9%+$0.30), Square (2.6%+$0.10), PayPal Here (2.29%+$0.09). One rate on every transaction regardless of card type — your debit card costs the same as a Visa Infinite travel rewards card. That spread is the processor's margin. Simple, predictable, expensive at scale.
Your statement shows the actual wholesale interchange rate (set by Visa/Mastercard) plus your processor's markup — separately. "IC + 0.25% + $0.10" is the format. You can see exactly what the network takes vs. what your processor keeps. The markup is the only thing you negotiate.
Transactions bucket into "qualified", "mid-qualified", and "non-qualified" tiers. Your processor decides which bucket each transaction falls into — and they have full discretion to downgrade a Visa consumer card from 1.79% to 2.99% for reasons buried in the contract. You can't predict or audit your effective rate.
Flat monthly fee ($29–$99) plus interchange at cost with zero markup. Stax: $99/month + pass-through interchange. Payment Depot: $79/month. Your effective rate falls as volume grows — the monthly fee amortizes across more transactions.
Some fees are genuine infrastructure costs. Others are profit lines that survive because merchants don't know to question them. These are the ones worth a phone call.
ERR — Enhanced Recover ReducedProcessors invented this to capture transactions that "almost" qualified for a better interchange rate. It's not a network charge — it's your processor's margin on a downgrade. A legitimate interchange-plus statement never has ERR; it passes through the actual downgraded interchange rate instead. ERR is definitionally a tiered-pricing construct and an accurate signal that you're on the wrong pricing model.
Any ERR charge = switch to interchange-plusSTMT FEE — Statement FeeA monthly fee, typically $5–$15, just to receive your statement as a PDF. Processors keep charging it because most merchants don't notice. Helcim and Stax both charge $0. The fee predates digital delivery and has zero cost justification in 2026. Most ISOs will waive it on request, particularly if you're processing over $20K/month — ask once, get it removed forever.
Red flag: statement fee above $10/monthPCI NONCOMP — PCI Non-Compliance Fee$10–$99/month for not completing your annual PCI DSS self-assessment. For most small businesses, compliance is a 20-minute SAQ A questionnaire (if you use a hosted checkout) or SAQ B (in-person only). Processors are required to help you achieve compliance — they're not supposed to profit from your failure to do so. If you've been paying this for more than 90 days, your processor hasn't done their job. Complete the SAQ and this disappears.
Red flag: paying this for more than 90 daysMONTHLY MIN — Monthly MinimumIf your processing fees don't hit a threshold ($25–$50), you pay the shortfall. It punishes seasonal businesses and new merchants in their first 2–3 months. A restaurant doing $200K/year never hits this. A ski rental shop in July might pay the full minimum every slow-season month for nothing. Established businesses processing over $15K/month consistently can usually get this removed entirely at contract renewal.
Red flag: monthly minimum above $25NON-QUAL — Non-Qualified Downgrade SurchargeOn tiered pricing, when a rewards card or corporate card triggers a "downgrade", you pay an additional 0.75%–1.5% on top of your base qualified rate. In a month where 40% of your volume is rewards cards — common in e-commerce and B2B — downgrade fees can double your effective processing cost versus what your processor quoted. The only real solution is leaving tiered pricing entirely.
Red flag: any non-qual surcharge on a high-rewards-card businessDCC — Dynamic Currency ConversionLets foreign cardholders pay in their home currency — with an exchange rate 2–5% worse than the bank rate. Your processor and ISO split the spread. Your foreign customer pays more. You pay a DCC fee on the transaction. Only the processor benefits. Many terminals have DCC enabled by default. For international businesses, turning DCC off (or to cardholder-choice only) is the correct setting — unless you have a specific revenue-sharing agreement and are actively telling customers they have a choice.
Red flag: DCC active without explicit opt-in and disclosureANNUAL FEE — Annual Account Fee$99–$295/year described as a "network participation fee", "IRS reporting fee", or "annual account maintenance fee". The IRS 1099-K reporting is automated and costs processors essentially nothing marginal. Annual fees above $99 from non-subscription processors are negotiating room — especially at contract renewal. If you process over $100K/year, you should be able to get annual fees waived entirely as a condition of signing.
Red flag: annual fee above $99 from a non-subscription processorTERS — Terminal Rental Fee$15–$100/month to rent a terminal from your processor. A Clover Mini costs $799 to purchase outright. At $45/month rental, you've paid for it in 18 months and are still renting. Many merchants have been renting the same terminal for 3–5 years, paying 3–5x its purchase price. Non-cancellable equipment leases (48 months, $40/month for hardware that costs $200) are one of the most predatory practices in the payments industry. Buy your terminal outright from an approved vendor.
Buy outright. $0/month terminal fee is achievable.