Reading your business account statement and finding the rates and fees you are being charged can be like playing “Where’s Waldo?”. One reason is that there are almost as many different statement formats as there are merchant acquirers. Also, due to how competitive the industry has become, many monthly statements do not fully disclose the fees charged. And sometimes they are completely hidden.

I know of banks that don’t even send a statement. If a merchant wants details of what he paid, he must log into an online account to find it.

It’s war out there!

One of the reasons for this is competitiveness. Remember that credit and debit cards are part of a $2 trillion industry. Money is like a magnet: it attracts Most merchants are continually contacted by competing processors trying to get them to switch processors, promising “lower fees”, etc.

Therefore, to prevent a merchant from being taken away by a sales agent from another processing company, some processors make it as difficult as possible for a competitor’s sales representative to enter a business, analyze a merchant’s statement, and make an “apples for apples”. comparison.

That said, there are still some basic clues to look for when reading your statement. Here’s what I look for when analyzing a merchant’s statement, in order:

• A: The price structure – How was the account set up? What pricing model do you use? Are you using tiers (eg 3 tiers, 4 tiers, etc) or are you using “Exchange Plus”? (NOTE: Most merchants use a tiered pricing model, which in my opinion is guaranteed to be overcharged. There are other pricing structures as well, but tiered pricing is by far the more common)
• Two: The monthly fees (sometimes called “Other”) – then I look to see what the monthly fees are. This may include: a statement fee; monthly service fee; account maintenance fee (normally you would only see one of these, although I have seen two, or you can see the equivalent fee but using a different term); PCI fee; lot fee; and gateway or access fees. Any miscellaneous fees, but not monthly, can also appear here, for example an annual or semi-annual fee.
• Three: processing fees – this is where the discount rates will be listed. If you have a tier price, Best Statements will print an itemized list showing the “qualified”, “mid-qualified” and “not qualified” rate (all 3 tiers). If you’re on Interchange Plus, you’ll see a list showing all the different cards you took, followed by the card’s actual interchange rate, the “dpi” (discount per item), plus the processors markup expressed as a base points and a transaction fee (or per item, depending on the term used to list it).
• Oven: Authorization fees – this is where you will find the fees that go to VISA and MC. They will appear listed as access fees, authorization and/or WATTS. You can also find AVS (address verification) rates here; evaluation fees; brand usage fee; risk commission; settlement fees, IAS fee (issuer access and settlement).
• Five: Third Party Fees – Third party means networks other than VISA and MC that are included in your account statement. This would include American Express, Discover and the debit networks if you are using PIN debit

Part of the problem with reading a business statement is that different processors use different category names and different terms to identify charges. That’s why I started by saying that it can be like playing “Where’s Wally?” While common terms are used for certain rates, a wide variation is also used, depending on the acquirer (the company with whom you signed a business agreement).

Again, part of this is due to an attempt to hide what is charged and make it difficult for a competitor to analyze a statement. While that’s ‘somewhat’ understandable, it’s a disservice to the trader in my opinion. Integrity requirements transparency. Maybe if processors were more merchant-oriented, they would have lower turnover and not have to worry as much about competition. At least that’s my opinion.