The reason Merchant Services is in quotes in the title is because this is a generic name for a credit card processor. People know what you sell but you are not using a unique name. It may make selling credit card processing easier when they are trying to sell their services. The client may not have heard of some small credit card processing company – but they have heard of “Merchant Services” You will also notice that the statement looks very similar to Bank of America’s statement. They may use the same back end – or it may be a BOA statement – just branded differently for one of their sales partners.
1. The summary of all Visa, Mastercard, Discover, and American Express credit card processing sales broken down by card type, number of transactions, and dollar amount.
2. The average credit card processing sale amount. (per transaction.)
3. This is a the base credit card processing rate. (Also known in a three tier rate system as the “qualified rate.”) You will see on the next page that there are many more charges in this statement. Many clients are convinced that this is all they pare paying – all they need to do is divide their total merchant service bill by total sales to see that this is not the case.
4. The base transaction fee. You will see additional transaction fees on the following page.
5. The total amount paid for all credit card processing fees. This client paid $817.09 in fees on $34,711.26 of sales. Their total percentage paid for their merchant services for the month was 2.35%.
6. Summary of fees associated wit hthe 1.79% “qualified” rate plus the $.18 base transaction fee. On page 2 you will see where all of the additional credit card processing fees are coming from.
7. The summary of all daily credit card processing activity.
1. The remaining summary of the daily credit card processing transactions.
2. Summary of total card fees.
3. Account on file fee. This typically covers the credit card processing statement fee, monthly service fees, and any costs to call customer support.
4. Data breach security program fee. Some companies my call this a PCI (payment card industry) security fee, or a PCI insurance fee. Either way – in most cases it is charged monthly. At the moment some people think it is a bogus fee – if only because they don’t seem to be getting anything for it. Most companies will charge a one time annual PCI compliance fee that will cover the client for the year. It typically covers the cost of surveying their business to make sure they
5. This section show the mark up over the standard credit card processing pricing. Some companies would call this the mid and non qualified rates. After you get to know the true cost of interchange fairly well you will recognize theat the mark ups shown are exactly what Visa and Mastercard charge. For example, Rewards 1 cards process at 1.65%, a .11% increase over a regular credit cards interchange rate of 1.54%. On this statement you see that the mark up was passed through at Visa’s interchange cost. This is true for all of the cards in this section.
6. American Express transaction fee. This is being charged by Merchant Services to run American Express transactions. You will notice there is no other Amex credit card processing information on this statement. Our statement show all of the processing information because we run Amex cards on our system. So the client gets one statement and one deposit for all card types. They end up getting their American Express funding instead of waiting 4 days for it.
7. This is the additional Visa and Mastercard credit card processing authorization fee. It comes out to $.05 per transaction, add the $.18 per transaction on page 1 to get a total of $.23 every time the client runs a Visa or Mastercard through their terminal.
8. Discover authorization fee per transaction.
9. More interchange pass through fees.
10. This is the pin entered debit processing fee. Their are two ways to run debit cards, on-line or off-line. This is the fee for running them on-line and having the client punch in their pin number.
11. Total additional fees due.
12. How total credit card processing fees are calculated.
We were able to save this client about 9% off of their total monthly credit card processing fees by changing them over to a straight interchange plus pricing structure.
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