How to understand your Merchant Account Statement


For a typical SME, their merchant account statement is about 5 or 6 pages long and are more complicated than a phone bill or an energy bill. Each merchant acquirer has different terminology and a different format for their merchant account statements making it very difficult to work out exactly how much you are paying for each transaction and to compare this to other suppliers.

This is deliberate on the part of the merchant acquirers – they know if they can “muddy the water” on the true costs and make comparison difficult then merchants are much less likely to switch suppliers. It is the very same tactic that energy companies used to deploy before the regulator stepped in to protect consumers. Some suppliers only provide summary information leaving it up to the merchant to request a more detailed breakdown (for example Streamline’s “Premium charges”). Others will break the cost of a transaction into component parts and display these in different sections leaving the merchant to piece these together if they are able (for example Global Payments will charge a processing fee, an “interchange differential fee”, a card scheme fee and an authorisation fee for one card transaction with each fee component located in a different place on the statement using different terminology).

We have lost count of the number of merchants who have told us they were on “good rates” but were oblivious to the premium and hidden charges which made their overall costs very expensive.

So we have put together a series of blog articles which aims to help merchants understand their merchant account statement and particularly the costs.  Armed with this information, we hope that more merchants will be able to tell a good deal from a bad deal and feel confident in switching suppliers if they are being over-charged.  After all, card processing is a commodity and there are no shortage of alternative suppliers!

A merchant account statement consist of 3 distinct parts :

1. Summary page

Shows the overall amounts processed and the total charges broken down into transaction charges, terminal charges , “other” charges and VAT. Remember that if your terminal or payment gateway is not provided by the merchant acquirer then you also to have to consider the terminal hire/payment gateway statement in calculating and comparing your total costs. (usually from an ISO or PSP)

2. Settlement Page

Shows the amount processed and settled each day and sometimes also by card type. You would hope that the amount processed will be the same amount settled but this is not always the case. For example if there has been a chargeback then this amount will have been deducted by the merchant acquirer and will show up here on your statement

3. Charges

Shows a breakdown of the amounts charged into 2 sub-sections :

    1. Transaction charges – normally shows the volume or value, the rate and the charge by each card type processed. Some merchant acquirers will show an all inclusive rate, some show a “standard” rate and separately show “premium charges” whilst others will break the rates down into multiple components.  To make matters even more complicated, each acquirer will have their own naming system for each card type
    2. Other charges – covers anything that is not included in transaction charges. It will include terminal hire, PCI compliance fees and PCI non-compliance fines, authorisation charges, set-up fees, minimum monthly service charges, etc. Not all merchant acquirers levy all of these charges and the staff within each merchant acquirer often have “leeway” to levy or not levy these charges. So at a very basic level of comparability it is important to understand whether you are currently being charged these extras.

As we add them, you can click the links below on how to understand a specific merchant account statement for the main acquirers and their charges on a comparable basis :

We’ll show you where in the merchant account statement to find :

  • Your total transaction rates.  It won’t be the “headline rate” that the salesman quoted but we’ll show you what “extras” to add in
  • Authorisation fees – adds c.20% to the cost of debit and a lot of merchants have negotiated not to pay these
  • PCI non-compliance fines of up to £75 per month
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