Some merchant say that their merchant Services statements look so intimidating, they don’t even look at it. But that decision could be costing your business a lot of money. It’s to your benefit to look through your statement each month, not just to ensure that there are no errors but to see if there are places you could be saving on processing rates and fees.
Truthfully, the statement looks more complicated than it actually is. Each section is organized to inform you about one of two things: deposits from customer purchases you processed, and fees you are paying for merchant services. Money in and money out.
Your deposits are itemized individually, showing you the date of purchase, amount and what 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. Or, if you’re using an online reporting system and keeping track throughout the month, you may want to skip this step.
There are several different types of fees, but they are organized in groups, so you should be able to understand them easily.
A 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. But you should definitely 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, you would be advised to 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.
Once you’re clear on both the deposits and fees listed on your merchant statement, you’ll have a better understanding of how much your net profit is each month. And you may notice patterns in your transactions that indicate the need to make some changes to your program. 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.
Your merchant services provider can be a strong advocate to help you work out the most cost-effective rates and fees. If you’re not getting that kind of service from your merchant services provider, you’ll want to consider making a switch to a provider that offers choices, support and all the information you need to help you save money and grow your business.