Credit Card Processing Statement PART 3 of How to Read Your Credit Card Merchant Statement
POSTED BY: Rhett Baylies
How to read your credit card processing statement Part 3
Understanding your cost to accept credit cards is an essential skill
Unfortunately, most business owners do not understand their credit card processing merchant services statement so in part 3 of our series we will discuss the final basic item that you need to analyze to find out if your are getting a good deal on your credit card processing. In parts 1 and 2 we looked at credit card processing rates so today we will look at credit card processing fees. The next step to understanding what you are being charged to accept credit cards and to find out where you can negotiate a better rate is by breaking out the credit card processing fees that you are being charged in addition to your processing rate.
In part 2 we showed you how to discover what type of credit card processing rate you are being charged so now it is time to separate out the monthly and annual fees that you may be charged. These can include but are not limited to the following application, per authorization, per transaction, set-up, statement, service, annual, minimum, and club fees. These fees are mostly profit and can be negotiated or eliminated.
To make it simple, with a traditional merchant services account, you should never have to pay for an application, set up, or annual fee.
Statement fees tend to be a reasonable fee that are passed onto business owners. Statement fees, however, should not exceed $10/month.
You may be charged service fees when you accept credit cards.
These may or may be attributed 3rd party services and statement charges that are being passed through to you. So if you have any service fees on your credit card processing statement be sure to have them clarified and reduced or eliminated if possible. This is a fee category that is often used for pure profit and may not represent a service.
Per Authorization and Per Transaction fees are NOT the same.
Most retail businesses should not be set up on a per authorization fee basis this can cost you money since you are being charged for every time a card is swiped versus being billed a per transaction fee. A per transaction fee is only applicable to transactions that are actually completed. Some businesses like certain bars will most likely be set up on a per authorization basis because they authorize a lot of transactions on a nightly basis. This time on the network’s servers does cost money.
Many merchant service providers offer some type of “merchant club”
These clubs may offer discounts on or free supplies, warranties, and discounted services such as phone service and office delivery services. These clubs are not a benefit to ALL businesses so look at the services offered and see if the club is an asset to your business if it is then see if you can maintain your membership for a smaller monthly fee and if you are not going to use the services offered then simply ask to cancel your subscription.
Monthly Minimum fees.
Most commonly there is a $25/month minimum placed on merchant accounts. Ask your service provider where your approximate break even point is (or the amount of Visa/MasterCard transactions that you need to process) in order to not have to pay towards the fee. Also ask if you have received any free benefits from having the monthly minimum (like a FREE Terminal). If you have not received any benefit and your business is not meeting the minimum amount ask for the fee to be removed or at least when your account is eligible to have the fee removed.
With this information you no longer have to be intimidated by your Merchant Services Credit Card Processing statement.
If you found this article helpful then please share it on your social media site and you will love our other posts that demystify and empower you to make sure that you are getting a good deal on your credit card processing. Better yet if you are not happy with the amount you are paying for your credit card processing or are still having problems understanding your credit card processing statement then simply visit our Get a Quote page so that the Merchant Doctor can show you what we can do for your business with our Low Rate Guarantee. Join us on FaceBook, Google+, Twitter, or LinkedIn.