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Learn how to decipher ALL the hidden fees on your merchant statement! This video breaks the statement down and explains each line item!
Dues and Assessments. This is a pass-through fee from mastercard, visa, of course will have their own news and assessments, american express and discover are the same. and then there’s some other fees that are also passed through by visa mastercard and those follow here under the authorization category. Dues and assessments and all these extra little fees called kilobyte fee license rate, noble fees, cvc2 fees, bin fee, etc these are all passed through from visa mastercard at the cost.
We have the rate up here and here we have a transaction fee or an authorization fee. This merchant had 52 mastercard transactions. Actually if you go up, they had 34 plus 13 which is 47. so they might have possibly well let’s see they had a refund so that’s 48 they might have had an inquiry or some court sort of a decline or something but there were a total of 52 transactions at 20 cents.
This merchant also has some kind of a gateway maybe they’re processing some transactions online and there’s an extra 20 transaction fee for that. These other fees of course were the pass-through fees. The interchange in this case is built in to these tiered rates and when a tiered rate is quoted it covers the interchange plus a profit for the processor.
The next category is mastercard offline debit. Offline debit means the debit card was run just like a credit card. There were no transactions at discount one under mastercard offline debit but under qualified discount so here the rate’s 1.89 percent times the volume 176.68, the charge is 334. then there’s some mid-qualified charges here’s the volume the rate and the charge 67.50. Again dues and assessments are in the license rate been or passed through from mastercard.
We have a american express category. Same breakdown this merchant had mid-qualified transactions. 930 dollars and 16 cents only one transaction, this was the rate, this is the transaction fee rate, this is the charge over here. And we go down to visa it’s pretty much the same same rates same transaction fee again there’s the pass-through fees visa offline debit, same deal, etc. Discover each brand has their own pass through fees from that card type discover or visa total card fees 1173.41, this includes the pass-through fees and the rate and transaction fee.
After the total card fees comes other fees. These are generally monthly fees sometimes an annual fee is thrown in. You can see there was a fee for the chargeback, the processor has costs involved in researching a chargeback so there’s a $25 fee that’s pretty common. Card point fee this is some kind of a monthly fee for having a merchant account open and being able to call and ask questions servicing that account. Sort of a minimum qualifying amount every month to have the account open. Then there’s PCI non-compliant fee, PCI stands for Payment Card Industry and the payment card industry has established PCI companies that ask merchants to do a survey annually to double check that they’re following good practices so it helps prevent fraud.
It is required for all merchants to be PCI compliant and if they don’t do that survey or they don’t allow their terminal or computer, if they’re doing processing on the computer to be scanned for viruses then they get a non-compliant fee and in this case this merchant is being charged 29.95 a month. Sort of a slap on the wrist to say, “hey why don’t you get yourself compliant and then that field would go away.” The total fees adding these monthly fees is this total 1173.41, plus these other fees of 74.90. Total fees 1248.31.
Now we go to a cost plus statement. I’ll show you how that’s different so the interchange rates that are established by the bank associations are those fees for those interchange rates and transaction fees are going to the issuing bank. If somebody prevent, presents a bank of america card in your merchant location the interchange fees go to bank of america. If they present a local credit union card, then those interchange fees are going to that local credit union card. The concept is that your bank or your credit union is advancing you money for 30 days and these interchange fees are sort of like interest that they get for loaning out that money ahead of time to you and the merchant.
In cost plus, It’s going to be interchange costs plus the pass-through fees that we talked about earlier under tiered plus the surcharge for the processor who is servicing your account. Again, this is another first data statement and it’s going to look similar. It has a summary by card type; mastercard, how many items the amount of mastercard, mastercard debit visa, visa debit then these card types are all pin debit. This merchant is processing a lot of pin debit where the customer presents their card for payment in the terminal or point of sale device and they have to enter a pin.
Pin debit interchange goes to the pin debit networks. Credit cards or offline debit go through the card, credit card networks interchange. We’re gonna see amounts funded by batch. This merchant is batching three times a day. Three times on the first, three times on the second, i’ll bet you the third was a Sunday, four times on the fourth, etc. All the way down these are all the batches. Every batch that comes out of your terminal on a piece of paper should match up to one of these batches on this merchant statement or every batch on an online e-commerce site. Again, you’ll have the batch totals and they should match up and go to the bank provided you are on monthly discount. There’s a situation called daily discount, where the deposit and the fees are taken out daily of each deposit. That is a kind of a bookkeeping nightmare but you see most people choose monthly discount so he processed 221.48 cents in that batch and that’s how much is sent to the bank.
Amounts here we still got another page because August he’s batching three four times a day for the total month of August. These totals are the same as above. Month end charge 524.69, that was from the previous month so that was taken out of the total and deducted from one of the batches or deducted separately from the bank account. Again, we have this amount submitted another summary by card type or by debit card type that matches up with everything above. Third-party transactions, none. There were no chargebacks.
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