If your business accepts credit cards, there are dozens of different charges that you could find on your monthly statement every month—many of which are hard to understand.
One fee that we commonly see is the MC DIGITAL ENABLEMENT FEE or DB/PREPAID MC DIGITAL ENABLEMENT FEE.
Read on to learn what this means and how much it costs.
What is the MC Digital Enablement Fee?
MC Digital Enablement Fee is a Mastercard assessment charge that was first introduced in January 2015. It applies to card-not-present (CNP) transactions for both debit and credit cards.
The current pass-through assessment rate for the MC Digital Enablement fee is 0.02% with a $0.02 minimum and $0.40 maximum charge.
According to Mastercard, this fee helps them provide enhanced security features for CNP transactions (like encryption and tokenization). So the fee is used to offset the costs that Mastercard provides for this “digital enablement.”
See the full list of Mastercard interchange rates here.
Understanding MC Digital Enablement Fee on Your Statement
Most merchants have never heard of the MC Digital Enablement or DB/Prepaid MC Digital Enablement until they notice it on a monthly credit card processing statement.
Is this fee legitimate? Do you need to pay this fee? Are you being ripped off by your processor?
These are all fair questions.
To clarify, MC Digital Enablement is a legitimate assessment fee that’s imposed at the card network level by Mastercard. This means that it’s non-negotiable, and you need to pay for it.
However, you should do some quick math to make sure that your processor isn’t “padding” your assessment fees. Some processors unethically inflate the assessments to make it look like the fees are coming from the card network. But in reality, they’re profiting from the difference between what you legitimately owe and what you’re being charged.
Don’t See the MC Digital Enablement Fee on Your Statement?
If you’ve heard of the MC Digital Enablement Fee but haven’t actually seen it on your statement, there could be a couple of different reasons why:
- All of your Mastercard transactions are accepted in person
- You’re on a flat-rate, tiered, or qualified merchant account agreement
The first reason is straightforward. This fee only applies to Mastercard credit and debit card-not-present transactions (online, phone, mail, etc.). So if you have a brick-and-mortar business and all transactions occur through a physical card terminal, you won’t pay this fee.
Other businesses that process Mastercard card-not-present transactions will pay this fee but don’t see it on their statement. It all depends on your merchant account agreement.
If you’re on an interchange-plus plan (which is the most-cost effective), then your processor will probably break down all of the interchange rates and assessments that have been passed through by Mastercard and the other card networks.
If you’re on a flat-rate, tired, or qualified plan, then you won’t see a breakdown of these charges. Instead, your processor simply charges you a flat fee per transaction (significantly higher than the interchange and assessments), and that’s really the extent of your statement.
But make no mistake, if you’re accepting card-not-present Mastercard transactions, then you’re paying the MC Digital Enablement Fee. Your processor just might be paying it on your behalf and marking up your rate significantly higher so you don’t realize how much of a profit they’re making each time you accept a card payment.