Business Owners: Here’s What Your Payment Processing Statement Can Tell You

For many merchants, monthly payment processing statements can be a source of confusion. They’re long, complicated, and often fail to comprehensively explain processing fees. It’s normal for merchants to pay little attention to these statements, or even ignore them altogether. This is a mistake.

For many merchants, monthly payment processing statements can be a source of confusion. They’re long, complicated, and often fail to comprehensively explain processing fees. It’s normal for merchants to pay little attention to these statements, or even ignore them altogether. This is a mistake. Though difficult to read and understand, your monthly payment processing statement contains a wealth of helpful information that can make a difference to your bottom line. If you’ve only been giving it a quick scan and then tossing it, you could be missing out on some opportunities to save money. You don’t need to be able to understand everything that’s presented, but if you know what to look for, your statement can offer more value than you might expect. Here are a few key elements of your statement to keep an eye out for:

1. Effective Rate

If you’ve been running a business for a while, you probably know that payment processing is expensive. In fact, it’s the second largest expense facing US businesses, behind only labor. And if you’ve ever shopped around for credit card processing services, you know that payment processing isn’t a very transparent industry. It’s plagued by price-gouging salespeople and surprise fees which can frustrate even the most experienced business owner. For inattentive merchants, these fees fly under the radar, but proactive merchants can often catch them right away.The best way to evaluate what you’re paying for processing is by calculating your effective rate. It’s a simple equation: Take the amount paid to your processor, divide it by the total amount transacted over the month, and there’s your effective rate. If your processor is sneaking extra fees into your statement, your effective rate will let you know when you compare it against the rates quoted in your contract. If the numbers don’t line up, speak to your processor and find out why (spoiler alert: they’re probably charging you extra fees).

2. PCI Compliance

If a company accepts credit cards, the law requires that they be compliant with the Payment Card Industry Data Security Standards (also called PCI for short). Most merchants are already compliant just by the nature of their POS software or hardware, but it’s still worth double checking. If a merchant isn’t compliant, their processor will charge them an extra fee. If that’s the case, the fee will be listed in your statement. Looking for this fee in your statement not only will tell you that you’re being charged an avoidable fee, but it will also tell you whether you need to certify yourself as PCI compliant. If you see this fee on your statement, visit to become certified, then pass the certification onto your processor. This will kill two birds with one stone: you’ll remove a fee from your statement, and ensure the security of your customers’ card information.

3. Customer Habits

One of the most useful things your statement can tell you about is customers’ spending habits. Most processing statements will show merchants what cards are being used most at their business. Statements also show transaction amounts on each card type. This information, along with the interchange rates for each card type, can be very valuable to business owners.For example, this information could be helpful when deciding whether or not to offer a special promotion or reward program. If your statements indicate that your customers are using cards that offer high-rewards, you might want to create a program that offers similar incentives. Even if you don’t need this information right away, tracking it over a period of time can give great insight into customer behavior and allow you to tailor your business to fit those habits.

4. How to budget for the future

Depending on certain factors -- like your pricing structure -- your processing rates may change as your revenues increase. Processing companies are required by law to let merchants know when they’re adding new fees or changing a pricing structure, but this information is often hidden deep within the pages of rarely-read processing statements.Merchants that know to look for these red flags hold considerable power in negotiating them away. If you notice that your processing company is about to change your pricing structure or charge you more, don’t hesitate to negotiate with them. If a change is non-negotiable, spotting the fees a few months in advance affords you time to adjust your budget to allow for the additional expense. Though your processor likely won’t change your rate too drastically in a given month, a series of unnoticed fees can add up quickly.Busy business owners want the important, need-to-know, things written out in bold so they’re never missed. Unfortunately, the payment processing industry doesn’t operate that way. To properly take advantage of the information offered in monthly payment processing statements, business owners have to take the time to understand exactly what’s included. An easy place to start is with the four tips listed above. As you get better at understanding what you’re looking at, reading your monthly payment processing statement will feel less like a tedious chore and more like a necessary piece of managing your business.

Taft Anderson

Taft Anderson

Taft Anderson is the former Product Marketing Manager of Swipesum. A graduate of Washington University in St. Louis' Olin Business School, Taft is a content and branding expert.

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