by Ben Dwyer Wondering about the “digital enablement fee” on your credit card processing statement? Mastercard’s Digital Enablement Fee is a charge to businesses that accept card-not-present transactions, such as those made on ecommerce websites.
Let’s take a look at when you’ll be charged, how much, and how to locate the fee.
- What is the Digital Enablement Fee?
- Credit Card Assessments
- Where to Find the Digital Enablement Fee
- Can I get the Digital Enablement Fee lowered?
What is the Digital Enablement Fee?
Mastercard’s Digital Enablement Fee is an assessment charge that Mastercard implemented in January 2015. The fee applies to all “card-not-present” transactions (typically ecommerce sales) including credit and signature debit cards, with the fee going to Mastercard.
Currently, Mastercard sets the Digital Enablement Fee at 0.01% of your card-not-present volume.
The Digital Enablement Fee helps with the costs of advanced security features for card-not-present transactions, such as encryption (scrambling card data) and tokenization (replacing card data with a “token” that is meaningless to hackers.) Mastercard expects the use of tokenization to increase, and seeks to offset the costs and receive compensation for that increase through the digital enablement fee.
Encryption and tokenization help protect cardholders when they make purchases online.
Credit Card Assessments
Assessment charges are one of the three components of credit card fees, along with interchange and processor markup. Assessments are set by the card brands and remitted to them through your processor. The Digital Enablement Fee is one of many different assessments that Mastercard charges.
See the full list of Mastercard assessments.
Where to Find the Digital Enablement Fee
Depending on the pricing model your processor uses, you may see the Digital Enablement Fee listed or you may not. Processors using interchange plus or tiered pricing typically list the fee. Flat rate processors do not. Note that just because the flat rate processor doesn’t list the fee doesn’t mean that you aren’t paying it. It simply means that they’ve lumped the fee with other charges and packaged it under one “rate.” More on that in the flat rate section below.
It’s also worth noting that while the fee will usually be listed on a tiered statement, it usually is not disclosed as part of your “rate” when signing up with the processor, which can make your pricing appear lower than it will really be. You can identify tiered processing by the presence of “qualified” and “non-qualified” rates. Look for anything labeled QUAL, NONQUAL, or NQUAL. Read more about tiered pricing.
The Digital Enablement Fee on Interchange Plus and Tiered Statements
On an interchange plus or tiered statement, the processor should list the Digital Enablement Fee in the assessment fees section.
The image below shows 3 different ways that you may see the fee listed. The processor may write it out completely, as in the top line, or abbreviate it, as in the middle and bottom lines.
In each line, you’ll also see the rate, the amount on which it was charged, and the total fee. Firstly, in the top and middle lines, the processor converted the 0.01% fee to a decimal, displayed as .000100. Looking at the bottom line, the processor left it as a percentage despite the lack of percent sign. You can check the processor’s math by multiplying the decimal by the transaction amount.
In the top line, 0.0001 * 2,485.56 = 0.248556, which rounds to $0.25, which is the fee charged and matches the column on the far right.
Checking the the middle line, 0.0001 * $2,431.25 = 0.243125, which rounds to $0.24, which again matches the column on the right.
Finally, in the bottom line, we need to remember to multiply by the decimal (0.0001) not the percentage (0.01). So 0.0001 * 11,304.50 = 1.13045, which rounds to $1.13.
Mastercard sets the Digital Enablement Fee at 0.01% of your card-not-present volume. If your processor charged you at cost, the total Digital Enablement Fee should equal 0.01% of your total card-not-present credit card sales.
CardFellow Clients
If you select a processor through CardFellow’s marketplace, you won’t have to worry. We require processors to pass assessments at cost, with no added markup. When we conduct your free statement audits, we check to make sure your processor priced assessments correctly. You do not need to do the math yourself when you receive statements.
If you’re not a CardFellow client, there’s no guarantee that your processor passes assessments at cost. You would need to check each assessment individually to determine if the processor padded costs. Ethical processors pass the fees to you with no added charges. However, some processors may add to the fees without telling you.
The Digital Enablement Fee on Flat Rate Statements
If you use a flat rate credit card processor you won’t see individual assessment fees on your statement. However, that doesn’t mean you aren’t paying the fee – the processor factors it into your “flat rate.”
While flat rate looks simpler, it’s not often the most competitive. Remember, assessments aren’t “extra” fees that flat rate eliminates. Assessments are part of every transaction. It’s just a matter of whether you see them (and can therefore determine if they’re at cost) or if the processor conceals them. Read more about flat rate pricing.
Can I lower the Digital Enablement Fee?
No, it’s not possible to negotiate the Digital Enablement Fee or other assessments. The only part of cost that is negotiable is the processor’s markup.
That said, many businesses overpay for credit card processing and could lower costs by securing a more competitive markup. You can see how much you could save by using CardFellow’s free quote comparison tool to get instant quotes with no obligation. Try it now!
