Crack the Code on Confusing Merchant Statements - Part 2

Nick Karcher


In last week's blog post, I shared the following three tips for reviewing merchant services statements. As you know, this is a very important skill given that one of your primary objectives is to grow your financial institution's merchant services program. Here are the tips I discussed:

1. Familiarize yourself with the key components of merchant services pricing.

2. Determine which pricing plan the merchant is on.

3. Try to look past confusing names and unorganized formatting.

This week I'd like to continue that conversation by sharing two additional principles.

4. Compare the counts and the amounts.

Believe it or not, some statements don't include the details that show how a per item cost results in a given fee. All statements should include how many items were billed, the cost per item and the total fee, including both percentage rates and per item fees.

Consider the following examples. The one immediately below is one of the worst offenders we've seen. This statement shows $51.26 for NABU and $180.29 for assessments, both with a quantity of one. This is obviously not correct. We presume NABU refers to the MasterCard Network Access and Brand Usage fee, which is $0.0185 per transaction, but this statement shows one transaction and no transaction fee. Assessments are likely the assessments from Visa, MasterCard and Discover, which are .11% of volume for both Visa and MasterCard, and .10% for Discover. Without any supporting details, how can the merchant verify whether or not his charges are correct?

Snippet of merchant statement

I'd also like to show you another example of a confusing statement. This one shows the volume for interchange, but no counts or rates.

Snippet of merchant statement

Here's another one where you can see the counts and amounts, but the merchant - or the salesperson - will have to get out their calculator to do the math.

Snippet of merchant statement

Now compare that to Clearent's fee detail section that clearly shows all details that result in the total fees being charged.

Snippet of merchant statement

5. Be on the lookout for unreasonable and ad hoc fees.

Unfortunately it's quite common among merchant services programs to see a variety of unreasonable monthly, annual or ad hoc fees. For example, many business owners pay a $10 monthly fee. However, don't be surprised when you see additional fees tacked on, such as those for ”debit access,” PCI compliance, supply clubs, monthly minimums, and more. Be sure you pay close attention to these fees as they're a common way for many processors to pad their pockets.

Take a look at the following example where the merchant was slammed with almost $100 in additional charges, including an Administrative Fee, Data Breach Service fees, Equipment Replacement and Supply fees, a Known Compromised Hardware Vulnerability Fee and more.

Snippet of merchant statement

And here's an example where the merchant didn't process a single transaction but somehow racked up almost $94 in fees.

Snippet of merchant statement

By being aware of the things that make merchant statements difficult to analyze, you'll hopefully be in a better position to promote your financial institution's merchant services program to prospective customers. If you're having a hard time analyzing a particular statement, imagine how confused the merchant must be!

Point out the issues you see that are preventing merchants from truly understanding their costs and fees. Then depending on your payment processing partner, you'll have the perfect opening to present a unique solution, one that boasts no hidden fees and the clearest, most detailed statement in the industry.