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Chapter 19 - Reading a Processing Statement

Transitioning to the card payments industry is often a two-edged sword: potentially a financially rewarding endeavor, yet often difficult for the sales professional new to an unfamiliar industry. This program is designed to assist both new and seasoned veterans attain true financial success by employing a simple and effective sales process.


Payment processing statements are monthly recaps of merchant sales activities tied to credit card purchases that provide important data for the business owner. The ‘processing statement’ shows important data such as sales activity, deposits into the merchants bank account, charge back occurrences, and processing fees.


Understanding payment processing statements (PPS) is a key skill set sales professionals in the payment industry must eventually master. This section will provide you a strong introduction to ‘making sense’ of a merchants ‘statements’. We will break a statement down into it’s four constituent parts and take our first look at specific industry fees.


Only so much can be gleaned from one chapter. Where can you go if you have additional questions regarding payment processing statements? We conclude this chapter with several recommendations, as well as outlining a process designed to assist you in growing your ‘statement analysis’ capabilities. Demystifying statements is a huge key to becoming a pro.

Chapter 19 - Reading a Processing Statement?

A vocabulary of truth and simplicity will be of service throughout your life
- Winston Churchill

Effective rates are helpful. They illustrate what percentage of merchant sales is ‘surrendered’ to the processor compared to the sales generated by accepting credit cards.

Many merchants prefer to look at this figure as it most accurately portrays  ‘final cost of sales’ and in effect sidesteps the more detail driven (and more confusing) aspects of card processing.

If you are paying attention, there are several ways processors assess fees. They can:

1. Add fees which in effect pay the acquiring banks (the players are the associations, and through them the issuing banks are compensated as well)

  • Interchange
  • Dues and Assessments

2. Add fees which pay the processor, ISO, MSP and Agent (the sales channels outside of those mentioned above)

  • Statement Fees
  • Batch Fees
  • Transaction and Discount rate Fees above interchange
  • Warranties, Customer Service Fees, Network Fees, etc.

Additionally, the fees can be displayed in such a fashion as to “complicate” or “marginalizes” the fees in question…and some fees are simply inaccurate. Refer back to the statement:

  1. Placing fees in the various sections of a statement can complicate the process of identifying the fees being charged. Some statements are even designed that a portion of the fees appear in one months statement and the remaining fees may fall into the next months statement!
  • Notice how “Discount Fees’ are on page 1 and then the additional processing fees are assessed on page 3 of the statement we just reviewed.
  • Notice how additional fees are passed on to the merchant with little explanation as to ‘what’ those fees are? Page 3 shows interchange being passed onto the merchant, yet there is no explanation as to what the various terms represent.
  1.  Dividing fees and naming them in such a fashion that independently the fees look small, yet collectively the fees are significant is another way to hide fees in plane sight.
  • Discount P/I on page 1 is a transaction fee of 20 cents per sale that was added to the discount. Yet on page 3 another ‘transaction fee’ called an ‘authorization fee’ was added to the mix. Collectively, this merchant is paying 55 cents a sale ON TOP OF DISCOUNT RATES!
  • Network and statement fees on page 3 could be the same situation where a simple ‘access fee’ from the processor is divided and renamed in one or more variations to justify additional income to the processor/ISO/MSP or agent.
 3. Inaccurate fees are more common than one would think in this day and age of high tech computers and automated billing - this is a good argument why an agent relationship between merchant and sales facilitator is a clear advantage:
  • Notice on page three how a ‘Monthly Minimum’ fee was assessed which was completely inappropriate
  • PCI fees on page 3 could be negated with the assistance of a sales agent.

Here is a key point: understanding statements and using the issues inherent in most can provide a significant tool to prove your value and win a merchants business.

As discussed in a previous chapter, merchant fees are typically assessed in one of two fashions - ‘interchange plus’ and ‘tiered’.

Option 1 – Interchange Plus (also called ‘Pass Through” and ‘Cost Plus’)

(Note: We are showing statement sections as there is no need to display Section 1 - Processor Identification Data or Section 2- Merchant Identification Data again)

The least common type of PPS, these statements may appear imposing to the merchant and those new to the processing field (due to the many lines of interchange displayed on the statement), yet are arguably . . . 

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