Understanding Your Credit Card Processing Statements

Understanding Your Credit Card Processing Statements

The headaches of running your own small business are numerous enough that understanding your merchant payment processing statement shouldn’t be one of them.  With a merchant card payment fee structure that is extremely complicated and convoluted, small business owners can sometimes feel lost when trying to decipher what their payment processing statements even mean.  Understanding your small business payment processing statement will allow for you to not only understand what you are paying for, but how those provisions might affect your business’ profit.

In an effort to simplify your statement we will attempt to breakdown what we will refer to as a “stock” payment processing statement.  By no means will this reflect the specific statement you receive, as every payment processing provider issues their own unique statement with its own unique layout.  However, by using a generic template we should be able to address the major components of the processing statements that a small business owner should see.

Typically the first provision that a merchant will find in a processing statement is the “card deposit summary” or in terms of some providers the “fund summary.”  This is the industry’s most frequent way to start a statement and will include a plethora of information regarding the charges you processed for that month.  Of the information found in a card deposit summary the most beneficial to a small business owner would be the number of transactions processed for that month, the amount processed for each of those transactions, and which cards were used for those transactions.  Also of import is information regarding any discount or coupon charges used.

Following the card deposit summary the statement should include a section that summarizes credit card fees.  The summary of card fees will address how much the credit card issuer charged for each qualified transaction processed.  In the summary of card fees you should be able to see any discounts, fees, and/or rates that were applied to the processed transactions made with your merchant account.  This should also include a complete list of all corresponding card fee categories as well as a listing for gross sales amounts for each credit card.

If you have made it this far through your statement know that the light at the end of the tunnel is fast approaching.  The last major section that you need to worry about is the transaction fees.  The transaction fees summary is an extension of the credit card fee summaries section except that it lists each transaction fee in dollar amounts.  This section can typically be the most frustrating for a small business owner as this section can get bogged down with terminology such as chargebacks, ACH return fees, batch header fees, etc.

The typical statement will usually add all statement fees together so that you have one total payment processing charge amount for the month.  Ensuring that all of the individual fees add up to the total monthly fee charged is recommend just to double check that your processor made no accounting errors.  While this may seem unnecessary, mistakes do sometimes occur and in the age of electronic statements this can be a relatively simple step.

By breaking your credit card processing statement down into these three main basic sections it is possible to de-convolute your statement that at first glance will usually look nothing more than an overly complicated stack of papers.  In taking the time to work through the confusion and understand all of the parts of your credit card processing statement you can ensure that your small business is getting all of the funds that it should, while also making sure that you not paying any extraneous fees.

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