How to Read and Understand Merchant Statements


A merchant statement is a summary of one’s monthly fees, sales, and transactions. Although the format is not regulated with a standard, it usually contains information such as account and business information, reserve and release activity, the statement summary, the amount of funding, dispute information (in the form of chargebacks and reversals), and merchant purchases. This may be in addition to an overview of miscellaneous transactions, interchange costs, transactions such as the total amount of sales, the subscription costs, or currency conversion fees, as well as graphs that showcase sales and purchase-related trends that occur on a monthly basis.

It’s integral for a merchant to take a closer look at their merchant statements, find trends, and identify where their business requires improvement. This ensures that unnecessary costs can be cut, problem areas can be addressed with either new or improved service providers, and the bottom line meets business goals.

A key aspect of a merchant statement is the credit card processing fees section. This is an important section to go over in detail in order to ensure that one is paying the correct rates and that the business is not overpaying in processing fees. By looking over this section on a periodical basis, merchants can save on costs and improve the bottom line in the long run. 

By looking over the credit card processing fees section, a merchant can also calculate their effective rate. The effective rate as a percentage is useful when making sure that one is not overpaying in processing fees. To calculate this, one should divide the total processing fees charged by the total of processed sales and multiply the number by 100. 

Another aspect of merchant statements to think about is the interchange fees. This transaction occurs between one’s bank and their customer’s bank whenever the latter party uses either an issued debit or credit card to make a purchase. If an interchange fee is 3%, then the merchant must pay $3 when a customer makes a $100 purchase. 

As for assessment fees, they are charged by credit card networks. Examples of these networks include American Express, MasterCard, and Visa. Taking one’s interchange and assessment fees into account helps one to better understand the costs associated with their selected payment processor. 

Getting the most cost-effective credit card processing rates is important to the success of a merchant’s business. There are several ways to achieve excellent rates, and one of them is by working with a company that is transparent in their actions and puts a focus on outstanding customer service. Merchant Broker understands the complexity that comes with selecting the best payment options. Our experts pride themselves with integrity, honesty, the commitment to the long-term success of clients, and intimate knowledge of the credit card processing industry through countless years of experience.

For service of the highest quality and to work with Merchant Broker experts, contact us at either or 1-888-668-0733.


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