Merchant statements are famously hard to read. Some run ten pages and use different names for the same thing. You don't need to understand every line, though. You need four numbers and a short list of fees to question.
Step 1: Find total card sales
Look for a summary near the top. It may say total sales, gross sales, amount submitted or net sales. Use the total card volume for the month, before fees are taken out. Note the number of transactions too, if it's listed.
Step 2: Find total fees
Look for total fees, total charges, discount and fees or fees deducted. If your processor takes fees daily, the monthly statement may show the total in one place. If you can't find a single total, add up every fee section.
Step 3: Calculate your effective rate
Divide total fees by total card sales. $900 in fees on $30,000 in sales is a 3.0% effective rate. This one number lets you compare any two pricing models fairly. Our effective rate calculator does the math.
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Step 4: Figure out your pricing model
If you see one rate applied to everything, you're on flat rate. If you see lines labeled qualified, mid-qualified and non-qualified, you're on tiered pricing, which often pushes many transactions into the expensive tiers. If you see interchange listed separately from a markup, you're on interchange-plus. More on the models.
Fees worth questioning
- PCI non-compliance fees. Often avoidable by completing a short questionnaire.
- Annual or semi-annual fees that weren't in your original quote.
- Statement or paper fees.
- Monthly minimum fees if your volume is low.
- Rate increases that show up as a notice buried on page four.
- Equipment lease payments that cost more than the terminal is worth.
- Early termination fees if you're thinking of leaving.
What's a 'good' effective rate?
It depends on your business. Card-present businesses with many debit cards usually land lower than online or keyed businesses with many rewards and corporate cards. Rather than chasing a universal number, compare your effective rate against real quotes built on your own statement.
General information only, not legal, tax or financial advice. Rates and rules change; confirm current details before acting.