Cultivating a habit of reviewing your merchantA business that accepts credit cards for goods or services. statements annually is one of the best ways to track your business growth and optimize your costs. It’s also helpful in maintaining accurate records and ensuring you’re getting the best deal from your merchantA business that accepts credit cards for goods or services. services provider.
Reading your statements might seem complicated, but if you learn how to read them, you can be certain your merchantA business that accepts credit cards for goods or services. service provider is truly a partner. A great provider will offer to read through your statements with you, ensuring there’s nothing you don’t understand and no fees that were not disclosed when you originally signed your service contract.
Keep in mind that your business will change and evolve over time – the types of cards you’re accepting, the size and quantity of transactions you process each month, and other factors can mean that a plan you set up several years ago may not be the best plan for your business today. In addition, at NMA we are always launching new features and products, so there may be new opportunities to grow your business with us.
What is a Merchant StatementA summary produced and mailed at specified intervals, usually monthly, which details debits and credits to the merchant depository account.?
Your merchant statementA summary produced and mailed at specified intervals, usually monthly, which details debits and credits to the merchant depository account. is the document you receive from your merchantA business that accepts credit cards for goods or services. services provider each month. It details all your transactions for the given month and each fee charged per transactionAn act between a seller and a cardholder that results in either a paper or an electronic representation of the cardholder’s promise to pay for goods or services received from the act. The action between a cardholder and a merchant that results in financial activity between the merchant and cardholder’s account..... The statement also usually summarizes your deposits, which breaks down all the fees paid to all parties, including those charged by your payment processorA large data center that processes credit card transactions and settles funds to merchants. A processor connects to the merchant on behalf of an acquirer via a gateway or POS system to process payments electronically. Processors edit and format messages and switch to bankcard networks. They provide files for clearing and settlement and other value-added services..... Reviewing your statement helps you understand each fee and double-check for accuracy and consistency between deposits and fees.
Performing a merchant statementA summary produced and mailed at specified intervals, usually monthly, which details debits and credits to the merchant depository account. review can be time-consuming – there are a lot of numbers to reconcile and justify. But reviewing your statement helps ensure you can identify pricing and discounts, as well as understand the report well enough to know if your provider offers the best service rate.
Why You Need to Understand Your MerchantA business that accepts credit cards for goods or services. Statements
Most people tend to avoid analyzing certain documents because they feel intimidated by facts and figures they don’t fully understand. One of the sections of merchantA business that accepts credit cards for goods or services. statements that many business owners have trouble with is the breakdown of various fees. Reviewing your statement helps you understand where every dollar deposited into your merchantA business that accepts credit cards for goods or services. account goes. Some of the reasons why merchantA business that accepts credit cards for goods or services. statements can be intimidating include:
- Knowledge gaps. It’s tough to grasp what you’re reading if you don’t know what it all means or what specifically you’re looking for. Learning a few statement basics helps you understand the document and how it affects your business.
- Not much consistency. MerchantA business that accepts credit cards for goods or services. statements can vary greatly between providers. Sections and subsections can be different, fees can have different names, and so on. This makes a statement difficult to read and hard to understand if you’ve switched processors recently.
- Not much transparency. Across merchantA business that accepts credit cards for goods or services. service providers, there are often issues with transparency. For instance, fees may be named in confusing ways or added costs can be tucked away and hard to spot. So, it’s a good idea to brush up on the various pricing models.
Break Down Your Credit Card Processing Fees
There are two key parts of payment processing fees:
- Wholesale
- Markup
When you read your statement, you must separate these charges.
- Wholesale or base fees are made up of interchangeThe exchange of debit and credit transaction data between merchant banks and cardholder banks based on an agreement (governed by BASE II [VISA] or INET [MasterCard]) between the participants. The fees charged by the Issuer to the Acquirer. fees and assessments. The interchangeThe exchange of debit and credit transaction data between merchant banks and cardholder banks based on an agreement (governed by BASE II [VISA] or INET [MasterCard]) between the participants. The fees charged by the Issuer to the Acquirer. fees go to the banks that issued the credit cards your customers used to make their purchases and assessments to the credit card company itself. These fees in conjunction create your base cost and this figure isn’t negotiable.
- Markups are any charges above your base fees. This portion goes to your merchantA business that accepts credit cards for goods or services. services provider and is negotiable.
In other words, imagine your gross fees equal $1,000. How much of that goes toward your base fee and how much is markup? By separating these fees, you can see how competitive your provider actually is. If your statement doesn’t reflect this breakdown of fees, it’s not easy to figure out how much is non-negotiable and how much is markup. In this case, call your provider and ask for the information.
Why Annual Statement Reviews are Crucial
Besides the real threats of fraud and identity theft, there are multiple other reasons why you should perform annual statement reviews. If you simply pay your merchantA business that accepts credit cards for goods or services. services bill each month without reviewing your statement, you might find you’ve been overpaying.
This doesn’t mean you can avoid all fees—they’re a part of processing. But you can keep them at a minimum when you learn what they’re for.
Also, of course humans aren’t infallible. Data is only as accurate as the person who entered it. Reviewing your statements when they arrive can help you catch errors right away. Not reviewing statements means errors can add up.
Your merchant services account statement should detail your deposits and all your fees. When you review, you’ll have a much greater understanding of both what accepting credit cards costs you and if your business is making—or losing—money. Performing annual statement reviews offers a much better understanding of your credit card processing costs and insight into whether you’re making money or losing it. Therein lies the true measure of your business’ success.
Find a Better Solution with NMA
Not all merchantA business that accepts credit cards for goods or services. services providers are created equal. Your current provider may not give much insight or care to be bothered with helping you understand your statements. Once you’ve identified and learned how to read the important parts of your statement, you’ll have a better understanding of your company’s cash flow and, if possible, where you can cut unnecessary fees.
If there’s anything you don’t understand, we can help. We’re happy to perform an annual statement review alongside you. Reviewing this together, we can identify where your business is experiencing growth and steps you can take to make your business even more profitable. If your current merchantA business that accepts credit cards for goods or services. services provider doesn’t offer the best solution for your business, give us a call.
Every provider is different. Researching merchantA business that accepts credit cards for goods or services. services providers is crucial so you can find the best service for your unique business— finding the best value, rate and service program for your business.