How To Read A Credit Card Merchant Statement – 5 Ways To Categorize Fees


Reading your merchant statement and finding the rates and fees you are charged may look like playing "Where is Waldo?". One reason is that there are almost as many different statement formats as there are merchant acquiring companies. In addition, due to the competitiveness of the industry, many monthly statements do not fully reveal the applied rates. And sometimes, they are completely hidden.

I know banks that do not even send statements. If a trader wants details on what he has paid, he has to log in to an online account to find it.

It's the war over there!

One of the reasons is competitiveness. Do not forget that credit and debit cards are part of a $ 2 trillion industry. Money is like a magnet – it attracts Most traders are constantly contacted by competing processors who try to change their processor, promising "lower rates", and so on.

So, to prevent a sales agent from another processing company to bring a trader – some processors make it as difficult as possible for the sales representative of a competitor to enter a business , analyze a merchant's statement and make an "apple for apples" comparison.

That being said, there are some basic keys to look for when reading your statement. Here is what I look for in the analysis of a merchant statement, in the order:

  • A: The price structure – how was the account configured? What pricing model does it use? Does it use levels (for example 3 levels, 4 levels, etc.) or – does it use "Interchange Plus"? (NOTE: Most merchants use a tiered pricing model, which, in my opinion, ensures that they are surcharged.) There are also other pricing structures, but the tier pricing is far the most common)
  • Two: Monthly fees (sometimes called "Other") – Then I look to see what are the monthly fees. This may include: statement fees; monthly service charge; account maintenance fee (normally you would only see one, although I saw two – or you can see the equivalent amount, but using a different term); PCI fees; batch fees; and the gateway or access fees. All miscellaneous fees, but not monthly fees, may also appear here – for example, annual or semi-annual fees.
  • Three: Processing fee – this is where the discount rates will be shown. If you use tier pricing, the best statements will print a detailed list of "qualified", "average qualified" and "unqualified" rates (all 3 levels). If you are on Interchange Plus, you will see a list showing all the different cards you have taken, followed by the actual interchange rate for the card, the "dpi" (discount per item), plus the processor markup expressed as a base . points and transaction fees (or per item, depending on the term used to list them).
  • Four: Authorization fees – here is where you will find fees that go to VISA and MC. They will appear listed as access, authorization and / or WATTS fees. You can also find here the AVS fee (address verification); appraisal fees; use of the mark; risk charges; settlement costs, IAS fees (Issuer Access and Settlement).
  • Five: Third party fees – "third parties": networks other than VISA and MC included in your return. This includes American Express, Discover and Debit networks, if you use a debit card debit service.

Part of the problem with reading a merchant's statement is that different processors use different category names and terms to identify charges. That's why I started by saying that it may sound like playing "Where's Waldo?" Although there are common terms used for certain fees, a wide variation is also used, depending on the acquirer (the company with whom you have signed a merchant contract).

Again, this is partly due to an attempt to conceal what is being charged and make it difficult for a competitor to analyze a statement. Although this is "a little" understandable – in my opinion, it is a bad service to the merchant. Integrity requirements transparency. Perhaps if the processors were more merchant oriented, they would have lower business numbers and would not have to worry as much about the competition. At least that's my opinion.


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