Statements are written for the processor, not for you. You only need three things from yours: what you actually pay, how you're being priced, and which fees have nothing to do with the card networks.
1. Find your effective rate
Your effective rate is your real rate with every fee included. Find the total fees for the month and the total card sales, then divide:
Effective rate = total fees ÷ total card sales
For example, a shop that paid $1,518.75 in fees on $40,000 of card sales has an effective rate of about 3.8%. That figure is an example only, not a quote. The point is that the effective rate is usually higher than the rate you were sold, because the quoted rate leaves out monthly and per-item fees.
2. Work out your pricing model
- Interchange-plus: a long list of card categories, each with its own rate, plus a separate line for the processor's markup.
- Tiered: sales grouped as qualified, mid-qualified, and non-qualified.
- Flat-rate: one rate for everything.
For more on the differences, read our guide to interchange-plus pricing.
3. Check the fees that aren't interchange
Interchange and card-network fees are set by the card networks and should be passed through at cost. These are the lines worth a closer look:
- Monthly or statement fee. A fixed charge for having the account.
- PCI fee or PCI non-compliance fee. Non-compliance fees are charged when the yearly security questionnaire hasn't been completed. Completing it usually removes the fee.
- Batch fee. Charged each time you close out the day.
- Per-transaction or authorization fees. A few cents per sale that add up at small ticket sizes.
- Monthly minimum. A charge if your fees fall below a set amount.
- Annual fee. Shows up once a year, so it is easy to miss when you only look at one month.
- Gateway fee. For online or keyed payments.
4. Look for what isn't on the statement
Equipment leases are often billed by a separate leasing company and won't appear on your processing statement. Check your bank statement for a monthly lease debit. Also read the message section of your statements, since that is where rate and fee increases are announced.
5. Compare two full months
One month can hide seasonal swings and fees that don't bill every month. Two full months, every page, from every location gives a fair picture. For annual fees, check the month they usually post, often January or your account's anniversary month.
Want a second set of eyes?
Send us your last 2 full monthly statements and we'll break down every fee, line by line, and show what you pay now next to what you could pay with ClearCost Payments. The Free Rate Analysis costs nothing and comes with no obligation.
This guide is general information, not legal or financial advice. Card-brand rules and state laws change, so check the current rules for your business.