How to Read and Understand a Payment Processing Merchant Statement

Knowing how to read and understand a payment processing statement can help your business save money. Learn more about merchant statements.

Payment processing statements are packed with information that can help you save money for your business. At the same time, the reports issued by credit card processors, also called merchant statements, aren’t exactly easy to read.

The information in merchant statements is in small type and spread across many pages. There are abbreviations, notations, and other tools used to fit lots of data into a compact format. These small details can be incredibly confusing if you’re not familiar with the structure and language of these statements.

There’s definitely a learning curve when it comes to understanding merchant processing statements. However, tracking the total credit card processing fees charged and understanding which are negotiable is crucial for reducing payment processing costs So is identifying your pricing model.

We want to make the process a little easier for you. Keep reading to learn about the information contained in your merchant statements and how to find room for cost savings.

Do you know you need to review your payment processing statements, but find yourself constantly pressed for time? You don’t need to take on this complex task all on your own.

Staitment can turn anyone into a payments expert. Learn more about our automated analysis solution for merchant statement review and try it out yourself for free.

Common Payment Processing Merchant Statement Fees

Payment processing is a complex business process, which means there are a wide variety of fees involved. Learn more about merchant account fees in our dedicated guide on the topic

Some of these fees are negotiable, while others aren’t. It’s very valuable to know where you can find room to reduce the total fees charged to your business. You can make the process more efficient by focusing on the fees that can be more easily and directly negotiated.

As you review your statement, keep in mind that most non-negotiable fees will either:

  • Be found in the interchange section or
  • Begin with the name of a credit card brand.

Here some of the most common processing fees:

  1. Interchange fees: These fees are set by card issuers and banks to address the cost and risks of processing card payments. In that sense, processors don’t control them. However, unscrupulous processors will engage in interchange padding, hiding their own fees among the legitimate interchange costs.
  2. Assessments: Assessments are revenue drivers for credit card companies. These are also non-negotiable because the processor doesn’t set them.
  3. Processor markup fees: These are fees charged by your processor, which they need to fund their business and earn a profit. These fees are negotiable, which means they deserve extra attention.

Processor markup fees include the flat fees, also called scheduled fees, charged by processors. Examples include equipment rentals (often more expensive on the whole than purchasing the necessary hardware and terminals), statement fees, regulatory fees, and PCI compliance fees. 

These are all charges originated by the processor instead of another payments stakeholder. That means there’s often room for negotiating them downward in your favor. Without other payment processing entities involved, there’s less complexity involved in questioning a fee and more room to request that it be reduced or eliminated.

Review this comprehensive list, under the flat fees heading for the full picture of fees that come directly from your payment processing provider.

Determining Effective Rate and Price Structure

A business owner calculates her effective rate using her merchant statement.

Calculating Your Effective Rate in Your Merchant Statement

Your effective rate is simply the amount you actually pay to your payment processing provider. Finding your effective rate is relatively easy and well worth the effort.

Because processors apply a broad range of potential fees, it’s not enough to look at per-transaction costs. Instead, you need the complete picture of costs that your effective rate, which is unique to your business, can provide.

All of the charges included in your payment processing statement need to be considered for a complete picture. It’s a straight forward way to truly determine the price your business pays to work with its current processor.

The effective rate formula itself is simple, although it can take a little time to find the needed figures in your statement:

  1. Identify the total amount of fees charged by your processor and total revenue before fees. These may be conveniently located near each other or spread out across the statement.
  2. Divide the total amount of fees charged by your total revenue before fees.
  3. To express the rate as a percentage, you can:
  1. Move the decimal point two places to the left, or
  2. Multiply the result of the calculation by 100.

That’s everything needed to find your effective rate. If your effective rate is significantly higher than what your credit card processor has quoted you, what should you do? You have two options to find savings: Negotiate or look for a new provider.

Swipesum can help your business with contract negotiations. We’ll also conduct a vendor evaluation on your behalf if you’d rather switch to a new payment processor. Learn more about our services.

Finding Your Price Structure

Credit card processors use three common models to calculate per-transaction fees for their clients. Your merchant statement itself may not include a clear identification of the model used. Here’s a brief review of each:

Flat Rate Pricing

Flat rate is the simplest price structure of the three, although it’s not necessarily the least expensive. Processors charge the same flat rate for all credit and debit card transactions in this model.

This single fee covers interchange fees, assessment fees, and other costs. This model makes statements simpler to read. However, flat rate pricing also makes it easier for processors to include and obscure significant markups.

Tiered Pricing

Tiered pricing organizes many different cards into a few different categories. Fraud risk and similar considerations are used to sort cards, and the fees vary based on the category. 

That can make your statement look simpler, but it also hides granular, per-transaction information that can help to identify where your total processing costs come from. Tiered pricing is highly discouraged because of its lack of transparency. It’s generally a sign that you should move to a different price structure.

Interchange Plus Pricing

The Interchange Plus pricing structure includes non-negotiable fees and a clearly defined processor markup. That markup could be a fixed cost, percentage, or both.

This pricing model leads to a statement with separate sections for interchange, assessment, and markup fees. That makes it easier to see where your money goes. That ultimately helps you determine if negotiable fees are too high.

For that reason, we highly recommend Interchange Plus pricing.

Finding the Lowest Costs for Your Business

We hope this guide to debit and credit card processing merchant statement costs and fees can help make this especially complex topic a little clearer. Merchant statements aren’t always designed with readability in mind, but you can understand them with this guidance.

Most importantly, we hope this guide can help your company save money on processing. Refer back to it whenever you need a reminder about which fees are negotiable and which pricing structures are preferred.

At Swipesum, we’re dedicated to serving as your fractional chief payments officer. We are fully independent consultants. Our only goal is to find the best solutions and pricing for your business, then monitor the health of your accounts moving forward.

Book a free consultation and try out our no-cost, automated Staitment solution. It can transform anyone into a payments expert, helping you review your payment processing statements and lower your operating costs.

Michael Seaman

Michael Seaman

Michael is the co-founder and CEO of Swipesum. A veteran of the payments industry, Michael and his brother Stephen have led Swipesum since its inception in 2016. In his free time, Michael enjoyes time with his three children.

Read more


Meet one of our payments experts to see if working together makes sense.

We will schedule a quick consultation call to go over how you're currently handling merchant services, and present a proposal at no cost.

Man smiling while folding his arms



We help businesses make intelligent payment decisions.

Learn more about Swipesum

audit Your Statements

Start with a free audit of your payments processing statements

Schedule an audit


Connect with a payments expert and get a free initial consultation

Book consultation

By submitting this form you agree to receive information about Swipesum product updates via email as described in our Privacy Policy and Terms & Conditions.