How to read your merchant statement like we do
Statements are formatted so you stop reading. This guide is the antidote: one number to calculate, seven fees to hunt, and a clear read on whether you have a problem.
Step one: calculate your effective rate
Find two numbers: total fees charged for the month, and total card volume processed. Divide fees by volume. That percentage is your effective rate, and it's the only number that can't lie to you, because it includes every fee no matter what it's called.
Example: $1,180 in total fees on $38,000 in card sales is a 3.1% effective rate. Whatever the salesperson once quoted, 3.1% is what you actually pay.
Step two: read your number against these tiers
Healthy. Someone negotiated well for you.
Worth investigating. There's usually money here.
Red flag. You're likely overpaying by thousands a year.
Step three: hunt the seven classic fees
PCI compliance fee
$19.95–$34.95/moBilled whether or not anyone helps you with compliance. Often stacked with a separate 'non-compliance' penalty.
Statement / service fee
$7.95–$15/moA fee for producing the bill that contains the fees.
Equipment lease
$30–$100/moFor hardware that costs a few hundred dollars outright. Over four years, the worst deal in payments.
Batch fees
$0.10–$0.30/dayA small daily charge for settling, which is the product working as intended.
Monthly minimums
$25+/moA penalty for slow months, on top of everything else.
Annual / 'regulatory' fees
$79–$199/yrAppears once a year with an official-sounding name and no official function.
Rate creep
quiet % bumpsThe padding on your rate inches upward over time, announced in fine print on page four.
Fair questions
What is an effective rate?
Total fees divided by total card sales for the month, expressed as a %. It's the single honest number on the statement, because it includes everything regardless of what the fees are named.
What's a healthy effective rate?
Under 1.5% is healthy. Between 1.5% and 2.5% deserves investigation. Over 2.5% is a red flag worth hundreds or thousands a year.
Why does my rate differ from what I was quoted?
Quotes usually cite the best-case tier. Your effective rate includes every surcharge, downgrade and monthly fee, which is why it's always higher than the pitch.
Are any of these fees legitimate?
Interchange, the wholesale cost, is real and identical for everyone. Some service costs are fair. The game is the padding stacked on top with official-sounding names.
Can I just send you the statement instead?
Yes, and most people do. Plain-English breakdown within 24 hours, free, no obligation.
Send one statement. Plain-English answer in 24 hours.