What’s an ISA Fee?

If you travel abroad, odds are good that you have seen it: an added fee on your credit card statement that gets added to your purchase. These added fees – known as an ISA Fee (International Service Assessment) – can get expensive if you make a series of transactions abroad. Thankfully, there are several ways to reduce the amount you pay with your International Service Assessment. 

What Is the Visa International Service Assessment (ISA)?

An International Service Assessment is a fee that is charged by Visa on foreign transactions. This fee is typically around 0.8 percent, but that is in addition to other fees that Visa may charge you. Unfortunately, these fees can increase based on other factors, including the country of origin, the other merchant fees they use, if a merchant passes along fees to the customer and more.  

When Is the Visa International Service Assessment Charged?

The customer is charged at the time of the transaction. The payment itself is due with the rest of your credit card payment – there is usually no delay. Furthermore, the 0.8 percent fee is assessed with every transaction. In other words, if you make ten transactions, you will be charged 0.8 percent of each transaction. 

Keep in mind that International Service Assessment fees are not exclusive to Visa cards. Other credit card companies also tend to charge fees for making foreign purchases and while these fees can vary in their overall percentage, you will almost certainly have to pay them if you use a credit card abroad. 

Having an International Service Assessment is more likely in some product categories, such as with high-risk payments, which often have financial transactions that run through different counties. This is why it is very important that you fully understand how your transactions work and what fees you will incur.  

Who Pays the Visa International Service Assessment Fee?

You do.

The Visa International Service Assessment fee has been around since 2008. This means that it appears as an added cost on your credit card statement. You will make the payment for your ISA Fee as part of your credit payment or ACH payment processing.

Unfortunately, you need to keep in mind that many of these payments occur even if you aren’t abroad! It may seem confusing, but the “international” part of the International Service Fee doesn’t refer to your location or even where the purchase is made from. Instead, these changes occur when they are related to a bank that is located abroad. This means that you may pay the fee even if you are in the United States.

How Can You Keep Foreign Transaction Fees Low?

Thankfully, there are many ways that you can keep your foreign transaction fees low or eliminate them. 

First and foremost, make sure to plan appropriately and examine if you have other credit card options that may be less expensive. Some cards offer lower fees and it may be worth contacting a variety of credit card merchants to inquire about the least expensive way to ensure that you are avoiding paying these extra fees.

Second, consider alternative arrangements. For example, making payments in cash may help you avoid these extra fees. Of course, paying in cash does have other drawbacks: You’ll likely have to pay fees for any conversions, you will have to carry around the cash and you may have to convert the money back into your home currency before returning home. 

Third, make sure to watch out for additional conversion fees. Some merchants will charge additional fees. It will take some legwork, but you should connect with your credit card company before making any foreign travel and ensure that they do not charge any additional fees. 

Fourth, if there are issues, you may want to examine what credit cards do not enact an International Service Assessment. These cards exist and if you travel enough, they may be well worth examining. That’s not to say that they will solve all of your problems, as they may come with flat fees, higher interest rates or a lack of benefits that you are more accustomed to with your already existing credit card arrangements. As such, you will have to do the legwork to determine if this arrangement is beneficial for you or your business. 

Fifth, talk with your bank or credit card company. They may have alternative arrangements that can save you money or may at least be able to provide you with useful advice that can ensure you are minimizing your fees. At a minimum, you should check out your online account options and make sure to let your credit card company know that you are traveling abroad. This is because many credit card companies will freeze your credit card if they detect foreign purchases, suspecting that your card has been stolen and is being used fraudulently. Not only can this be exceptionally problematic if you are traveling abroad, but it can be expensive, as you may need to seek alternative payment arrangements or pay a fee to unlock your credit card.

Finally, if you are not traveling abroad but get hit with these fees regularly, make sure to examine where you are making purchases are if you are making purchases at establishments or websites that are located abroad. This would explain why you are incurring these fees and examining your repurchasing options may be able to reduce your rate.

Frequently Asked Questions

The confusing nature of the International Service Assessment has left many merchants confused about what it does and how it can be reduced. Fortunately for you and your business, the International Service Assessment has been around for some time and if you have questions about it, it has probably been asked and answered in the past.

Can the International Service Assessment Fee Be Negotiated?

No. Processors don’t negotiate these fees on an individual business. Charges do change based on certain factors, such as the type of transaction, the size of the business and the volume of transactions that are processed. However, if you are looking for a better rate and trying to find someone to call and get one, you’re going to be out of luck. Remember, Visa is a massive company and as such, they have no financial incentive to allow such a negotiation to take place. Third-party processors can help you find ways to reduce your costs otherwise, however, and that helps explain why using these processors is often worth it. 

What Other Fees Do I Have To Watch Out For?

Sadly, this isn’t the only one. There is also the International Acquirer Fee or IAF. This fee is assessed in almost identical circumstances to the ISA and can result in another .45 percent fee. This is on top of the IAS. In other words, you can lose somewhere between 1-2 percent of a transaction to a fee. In small doses, this won’t bankrupt you, but if you make dozens of transactions – or one big one – you could find yourself out of a lot of money. 

What Other Fees Do Non-VISA Cards Levy?

Keep in mind, these are just for Visa’s fees: Other cards may assess other fees. For example, MasterCard will ass a .4 percent International Cross Border Fee and this is essentially the same as the International Acquirer Fee, in that it can be applied for any transaction that is run through a bank outside of the United States. To make things just a touch more expensive, MasterCard will also tack on another .55 percent for their Acquirer Program Support Fee. This fee gets added on for US dollars, for a US business, if the Mastercard that is used is used outside of the United States. 

If you have a Discover Card, you will be paying international fees as well, although Discover’s fees are slightly easier to understand. First, Discover will levy a .55 percent International Processing Fee. This fee hits customers who pay for a transaction that takes place in the United States, but with a card that was issued out of the United States. There is also the International Service Fee of .8 percent, which hits under the same circumstances. As such, the most you can pay for an international fee with Discover is 1.35 percent. 

Last is American Express. Unlike the other three cards, American Express will fluctuate their card fees depending on the volume and specific circumstances, so it is more difficult to fill in a set fee. The one thing that is guaranteed is a .4 percent Cross-border fee. This fee hits when a customer pays for an item that reconciles in a bank that is located outside of the United States. 

 As you can see, all credit cards aren’t created equal when it comes to the total fees that you will wind up paying. Some have highly variable fee schedules, while some are much easier to understand. This makes it more challenging for the average consumer, as you aren’t necessarily sure which card will work best for your personal or business situation. 

So… Is the International Service Assessment Fee the Same As the Interchange Fee?

Nope. The interchange fee – which is a.13 percent fee that applies to other visual transactions – is separate from the International Service Assessment. This may lead you to another important question: Do you pay both of those fees? Unfortunately, yes. And it may get even worse: Depending on the nature of the transaction and where the transaction is taking place, you could wind up incurring additional fees. This can continue to drive the fees that you pay upwards. By the time you are done, you may be paying up to 1.59 percent in a variety of other fees, which may also include an International Acquirer Fee.

What if the Payment Is Online?

You may think it makes a difference if the payment occurs over the Internet as opposed to in a brick-and-mortar store, but that is, sadly, not the case. The fee is assessed based on the pre-determined factors and agreements in each cardholder and merchant agreement and nowhere does the ISA fee alter based on the location of the final sale. This means that you’ll be paying the fee regardless of how the fee was levied; as long as the transaction was international, you’re going to owe the credit card company more money. 

Unfortunately, online payments can often make you more likely – not less likely – to be hit with an ISA Fee. In most cases, if you are making a payment in a brick-and-mortar store, you know that the payment is going to run through an American bank. Unfortunately, this often isn’t the case with websites, many of which use financial institutions that are located outside of the United States. If paying the ISA fee is a concern for you, you may want to double-check with the vendor before finalizing your transaction.

Where Can I Find My International Service Assessment Fees?

Thankfully, credit card companies will usually make it easy for you to find such fees. They usually appear in your credit card statement, on your list of transactions. They are not usually separated by each transaction: Instead, they will be labeled as something like “Visa Intl Service Fee” with the number of fees assessed that month, as well as the total you owe on each fee. Since paper statements will not usually break out these fees on a transaction-by-transaction basis, you may have to log into your online account to get this information. 

If you are interested in learning more about Visa International Service Assessment fees or in exploring a variety of low-cost and high-quality credit and merchant solutions, contact Bankcard today