How to read a merchant statement
Your processing statement is not hard to read by accident. Here is how to get the truth out of it in about ten minutes.
Start with one number, not fifty
Ignore the rate you were quoted. Ignore the tier names. Find two figures on the statement: total card volume processed, and total fees charged. Divide the second by the first, multiply by 100, and you have your effective rate.
A business processing $68,000 with $2,318 in total fees is paying 3.41%. It does not matter that the sales rep said 1.79% — the 1.79% applied to one interchange category that maybe covered a third of the transactions.
The effective rate is the only number that compares two processors honestly. Anyone who steers you away from it is telling you something about themselves.
The four layers of a statement
1. Interchange
Paid to the bank that issued your customer's card. Published twice a year by Visa, Mastercard, Discover, Amex and Interac, and identical for every processor on earth. Nobody can discount interchange. What they can do is make sure your transactions qualify for the cheapest category they are eligible for — or fail to.
2. Assessments and network fees
Paid to the card brands themselves. Small, fixed, and also non-negotiable — but frequently marked up and passed to you as if they were cost. If your statement shows an assessment rate above the published figure, you are paying margin dressed as pass-through.
3. Processor markup
This is the part that is actually being sold to you. Under interchange-plus it appears as a visible basis-point figure plus a per-transaction fee. Under tiered pricing it is invisible by design, buried inside "qualified", "mid-qualified" and "non-qualified" buckets whose definitions your processor writes and can change.
4. Monthly and incidental fees
Statement fee, monthly minimum, PCI program fee, PCI non-compliance fee, annual fee, regulatory compliance fee, batch fees, gateway fees, chargeback fees. Individually small, collectively often 15-25% of what a small merchant pays.
The seven lines worth arguing about
- PCI non-compliance fee — $19.95-$39.95 monthly for not having filed a questionnaire nobody helped you file. Pure penalty revenue.
- Statement fee — $9.95-$29.95 a month to receive a PDF.
- Monthly minimum — a charge for not processing enough. It exists to make small months profitable for the processor.
- Annual fee — $79-$149, usually appearing in a month you are not watching.
- "Non-qualified" surcharges — the tiered-pricing engine. Every rewards card, business card and keyed transaction lands here.
- Padded assessments — compare the assessment rate on your statement against the published card-brand figure.
- Equipment lease — the most expensive line on many statements, and usually a separate non-cancellable contract with a leasing company, not your processor.
Three checks that take two minutes each
Check the downgrade share
Find the count of transactions in your worst-priced category and divide by total transactions. Above 25%, something is misconfigured: missing AVS data on keyed sales, delayed batch closing, or address data not being passed on card-not-present transactions. Each has a fix that costs nothing.
Check the per-item weighting
If your average ticket is under $20, per-transaction fees matter more than percentage rates. Ten cents on a $9 sale is 1.1% by itself. Small-ticket businesses are routinely sold percentage-focused deals that are wrong for them.
Check month-to-month drift
Pull three statements and calculate the effective rate for each. A rate that climbs 5-15 basis points a quarter with no change in your card mix is rate creep — the industry's quietest revenue model. It is rarely announced and almost never noticed.
What "good" looks like
| Business profile | Competitive effective rate | Worth reviewing above |
|---|---|---|
| Card-present retail, $50K+/mo | 2.10% - 2.45% | 2.90% |
| Restaurant, $60K+/mo | 2.25% - 2.60% | 3.10% |
| eCommerce, mixed cards | 2.50% - 2.95% | 3.40% |
| B2B with commercial cards | 2.00% - 2.60% with Level III | 2.90% |
| Small ticket under $15 | Judge on per-item, not % | Any plan without a per-item quote |
These are ranges, not promises. Card mix moves them, and a business with 70% rewards-card volume legitimately costs more to serve than one taking mostly debit.
What to do with what you find
Two honest options. Take the numbers to your current provider and ask them to match a properly structured quote — plenty of merchants do this successfully. Or move. Either way, calculate the effective rate first, because a negotiation without that number is just a conversation about adjectives.
If you would rather not do the arithmetic yourself, send us one statement. Every line comes back labelled inside 4 hours, free, and yours to keep whichever way you decide.
Related questions
Total fees divided by total card volume, expressed as a percentage. It is the only number that lets you compare two processors fairly, because it captures every fee rather than the headline discount rate.
2.1%-2.6% for well-priced card-present retail, 2.6%-3.2% for mixed or card-not-present, and higher for B2B on commercial cards or businesses with small average tickets. Above 3.4% on in-person volume, something is usually recoverable.
Interchange set by the card-issuing bank, card-brand assessments, and network access fees. Everything else — processor markup, statement fees, PCI fees, monthly minimums, annual fees — is a commercial decision someone made.
Every fee named in 4 hours. Or call now and we quote you on the spot.
Everyone else in this industry says twenty-four hours. We say four — and if that is still too slow, pick up the phone and get your numbers while you are on the call. No contract, nothing to cancel, no pressure.