how to read your merchant statement

Some merchants say that their merchant services statement looks so intimidating they don’t even review it. If you’re one of them, that decision could be costing your business a lot of money. Constant Processing believes that it’s to your benefit to look over your statement when it arrives each month, not just to ensure that there are no errors but to identify any areas where you could be saving money on processing rates and fees.

Money In, Money Out

In actuality, the merchant statement looks more complicated than it really is. Each section of the statement is organized to inform you about one of two things:

  1. Deposits from customer purchases you processed
  2. Fees you are paying for merchant services

Deposits are itemized individually, showing you the date of purchase, amount and which card was used. If you had a good sales month, this section may take up a few pages. You can compare this list to your own saved receipts or invoices. If you’re using an online reporting system and keeping track throughout the month, you’ve already got this step covered.

Processing Fees

Fees come in several different types but they are organized in groups, so you should be able to understand them easily. For example, the discount rate is a percentage of each transaction amount that is deducted from that transaction. Your discount rate may be different for each transaction, based on the transaction type. You agreed to your discount rates when you signed up with your merchant services provider, and you can see the rates on your statement in the legend area. Contact your merchant services provider if you don’t know or understand your discount rates.

A transaction fee is a flat fee, charged in cents, that is deducted from every card transaction. You also agreed to this fee when you signed up with your merchant services provider. Unlike discount rates, transaction fees are the same for every transaction.

Monthly fees are charged for various merchant services and vary depending on the type of processing your business performs, your pricing plan and other aspects of your merchant agreement. If you have any questions about these fees, contact your merchant services provider and ask for a full explanation.

Miscellaneous fees are charged on a non-regular basis for different reasons. There may be a new government regulatory fee that is charged annually or quarterly. Or there may be an industry fee for such things as PCI compliance. If you ever have questions about miscellaneous fees, your merchant services provider can answer them for you.

The Bottom Line

Once you’re clear on the deposits and fees listed on your merchant statement, you’ll have a better understanding of your net profit each month. You may notice patterns in your transactions that indicate the need to make some changes to your merchant account agreement. It’s important for you to understand your statement and the numbers on it so you can make informed decisions about your business’ financial situation.

As a merchant services provider, Constant Processing works with its merchants to help them work out the most cost-effective rates and fees. If you’re not getting that kind of service from your current processor, consider making a switch to Constant Processing for more choices, support and all the information you need to help you save money and grow your business.