Reading Merchant Processing Statements

Reading Merchant Account Processing Statements

Reading and understanding your monthly merchant processing statements can almost seem like an impossible task. Many business people have admittedly given up on trying to decipher the different rates, fees, and industry terminology on their statements. Being able to read and understand your merchant account processing statements is crucial to maintaining the best merchant account for your business.

This section of the Merchant Account Information Guide will show you how to correctly read and understand your merchant processing statements. Each merchant service provider has a slightly different layout to their statements, but all merchant account statements follow the same general guidelines, making it possible for you to use the information within this section to help you understand your individual statement.

Prior to reading this section you should have a solid understanding about the different qualification rates for VISA and MasterCard transactions, and what can make a transaction downgrade to a higher discount charge. If you have not yet read section 4 of this guide titled " Merchant Account Rates & Fees " we strongly suggest that you go back and do so before proceeding.

Some merchant service providers offer more detailed statements than others. The more detail a statement goes into about individual transactions, the easier the statement will be to read and decipher. Unfortunately, there is little that you can do (short of switching providers) if your processor provides poorly detailed statements. Not too worry, after reading this section of the Merchant Account Information Guide you will be able to read your statements not matter how basic or complicated they may be.

11-1 VISA & MasterCard Interchange Qualifications

The first thing to understand before you can accurately interpret your statements is how VISA and MasterCard (the card associations) qualify different transactions. As we have covered in previous sections of this guide, VISA and MasterCard assign different risk levels to different types of transactions and different types of credit cards. Each risk level is assigned a qualification category that corresponds to a percentage increase in the overall discount rate that you will pay to process specific types of transactions.

We have also explained how most merchant accounts generalize different qualification rates into three basic categories called qualified, mid-qualified, and non-qualified. There are merchant accounts that are set up to pass along the exact percentage increase that VISA and MasterCard charge, but these accounts are not as lucrative to processing banks so they tend to be uncommon. This will all start to become clearer as you progress through this section.

We understand that this subject can get confusing at times, but the knowledge that you gain will be well worth it when you can apply it to your own statements and start saving money. This section also provides images of sample statements from different merchant service providers and processing banks to help illustrate how the qualification rates and categories will be represented on your statements.

The following links point to the VISA and MasterCard Interchange Qualification Matrix. This is the guide that shows you how a transaction will qualify or be charged when it is run a certain way. You can also use this matrix to maximize the amount of qualified transactions that you run through your merchant account. Don't worry if the information looks a little confusing and intimidating now, it is necessary to expose you to it first because we will be referring back to it throughout this section. By the end of this section you should be fairly comfortable with the Interchange Qualification Matrix, and you will be able to use it to your advantage.

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