11-3 Merchant Account Statement Layout

Merchant Account Statement Layout

We are sure that your head is spinning a bit from reading the Interchange Qualification Guides in the last section. Hopefully you still have these guides open in a new browser window because we will be referring back to them in this section. If you do not have the guides open in a new window please go back and do this now.

It may seem like your merchant service provider is purposely making their merchant account statement next to impossible to read and understand. This tends to be the sentiment of most business people until they learn how to read the statements properly. Once you understand how the statements are portraying the financial data, they are actually quite helpful in showing you how your processing charges are being applied. Again, some statements are more detailed than others and we have done our best to generalize the descriptions in this section to match most statement layouts.

Summary of Card Deposits
The first section of most processing statements is a section called something to the affect of " Summary of Card Deposits " or " Funding Summary ". This section of the merchant account statement does just what the name implies by showing you the number of transactions made during the month, the dollar volume of the transactions, the break-down of card types (VISA, MasterCard, American Express, Discover, etc.), general discount charges, and possibly more depending on your processor.

This section of the statement may show the depository information as monthly grand totals, or it may break it down into individual daily settlements. Some processors have a separate section on their statements to show the individual daily deposits, and others combine this information into a single section. Again, this will depend on your provider.

This section of the statement is especially useful if your provider breaks the deposits down into daily amounts because you can cross-reference the information with your depository checking account statements. This section is not very useful in trying to figure out how much you've been charged for processing. The sections that follow offer the most detail about actual charges.

Summary of Card Fees - Settlement Discount
The section of your merchant account statement titled "Summary of Card Fees" (or something similar) is the section that will tell you how much was charged for qualified transactions. Only qualified rates are deducted from transaction amounts in this section, because the qualified discount rate applies to all transactions that are run through the merchant account. Qualified discount fees are almost always broken down in to card types, which are then displayed as separate total.

Some merchant service providers will list all of the fee categories (qualified, mid, non) in the summary of card fees, where they will display the gross amount of sales for each card type next to the qualification category that it was processed at.

Surcharges - Discount Qualification Fees
This is where your statements may start to get a little confusing. The section of your statements called something to the affect of "Surcharges" or "Discount Qualification Fees" is the section where all of your mid and non-qualified transactions are listed. This is the section where you should see all of the abbreviations and industry terminology found in the Interchange Qualification Guides. This section will usually start off listing the type of transaction. For example, the first entry in this section may read "MERIT III", followed by the number of transactions that ran at that qualification level throughout the month, then by the gross dollar amount of charges, followed by the total fees applied to the balance.

All of the fees listed in this category are in addition to those already noted in the summary of card fees. The reason for this is that only the qualified discount rate is deducted in the summary of cards fees. Any additional charges that apply throughout the month because transactions have downgraded are charged above and beyond the qualified rate. In order to realize your total processing fees you will have to add your summary of qualified card fees to the surcharges.

Processing Fees - Transaction Fees
The last section of fees on a statement is usually the section that details all of the fees that are expressed as dollar amounts rather than percentage charges. For example, a monthly statement fee of $10 or a batch header fee of $0.25 would be placed in this section. Pay special attention to this section, because this is where those notorious unmentioned fees usually appear.

The most common surprise fees that appear in this section are fees called WATTS fees , AVS fees , help desk fees , and batch header fees. Any chargeback fees and return fees will also be listed in this category because they too are flat-dollar fees. At this point you are finally ready to total all of your processing fees on the statement. Add together the discount fees, the surcharge discounts, and the transaction/processing fees and you will have your total processing charges for the month. Some merchant account statements will already total the qualified discounts with the surcharges leaving you to add that total to the flat-dollar fees in order to find the total charges for processing.

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