How to Read Your Payment Processing Statement
There are enough columns and sub-headings on a payment processing statement to make the most seasoned CPA cry. If you are looking for a clear indication of how much you are really paying for your credit card service…good luck. Sudoku would be easier. Hidden fees and mark ups are everywhere. Let us show you a few things to look for.
Discounts
Discount Rate or Discount Percent: this is number that will make you happy, because it is probably the number that you were promised when you signed up. There could be as few as three of these rates, if you signed with a tiered program, but you could also see closer to twenty if you went with Interchange plus. For the sake of cost savings, the more rates you see on your statement, the better. Let’s say, for the sake of argument that one of the numbers you see on your statement is 1.35%. That’s a good rate, but don’t get too attached to it because it won’t last for long, thanks to…
Card Fees
Visa or MasterCard Assessment Fees: This is the first and most obvious mark-up you may find on your statement. Currently, this is usually at around 0.11. Now add that to your original rate of 1.35 and say goodbye to your promised rate. 1.46 is now your new rate.
Per Item Fee or Transaction Fee: In addition to the percent that is taken for each transaction, there will be a flat fee for each item as well. This will usually fall between 0.08 cents and in some cases, as high as 0.40 cents.
Provider Fees
Daily Discount: This is the most sinister and hidden fee on your statement. It’s another way of taking an additional 0.05 cents or so, per item out of your profit margin. It is subtracted on a daily basis, instead of in one lump sum so that you don’t feel the pain as much. Daily discount disguises the total cost of processing by breaking total charges into “discount paid” and “discount due” amounts. In order to realize how much a business paid in payment processing fees, these charges taken throughout the month must be added to charges taken at the end of the month. Statements often misleadingly make it appear that total charges are only those that were deducted at the end of the month. Look closely.
Other Fees
FanF, PCI, Regulatory, Monthly Service Fees: These costs are common and for the most part, unavoidable. However, they can be marked up tremendously so make sure you ask about them specifically while you are shopping rates.
National Processing will help you read your payment processing statement for free and find the hidden costs that are diminishing your bottom line.
Call us for a free analysis today. 1-800-720-3323.
