How to Read an Interchange Plus Pricing Merchant Processing Statement
Credit card processing merchant account statements come in many different varieties, and are notorious for being confusing and hard to understand. This makes it difficult for merchants to compare one pricing program to another, or even to determine the costs of their current plan. Interchange Plus merchant account statements can seem even more confusing at first, but if you know the lay out of the statement, and you know what to look for, everything can fall into place pretty quickly:
- Summary: Most statements start with a summary showing the sales processed by card brand (dollar volume and number of sales) and a summary of the total fees paid to process those sales. The summary will also usually include the numbers of refunds, chargebacks, and adjustments to the account, if any. Most summaries will also usually have a breakdown of sales by card brand.
- Deposits: After the summary there is often a list of settlements or batches by day that breaks down each day's sales volume by card brand and amount. This is useful for reconciling settled batches to deposits into the merchant's business checking account.
- Interchange: On an interchange plus statement, this section will show the actual interchange fees paid by card type and card brand. Typically this section will include a lot of acronyms that might not make sense at first, like "VSP RTL" or "RETAIL D R". Each acronym stands for an actual V/MC/D interchange rate corresponding to a specific card brand and card type (VSP RTL = Visa Signature Preferred Retail, RETAIL D R = Visa Retail Debit Regulated). The Interchange section should show the Interchange fees by both rate and per item (VSP RTL: 2.10% + $0.10, RETAIL D R: 0.05% + $0.22). Compare these charges to the actual interchange tables on the V/MC websites or on websites like Burlington Bank Card to confirm that the true interchange costs are being passed thru. Reviewing the interchange rates with a qualified merchant service provider will also help you determine if you are receiving the best possible interchange rates for your Merchant Category Code (MCC). If you are seeing interchange rates for EIRF/STANDARD or DATA RATE 1, for example, you may be able to make changes to your processing practices and obtain lower interchange costs.
- Assessments: This part of the statement will show the Dues & Assessments paid to the V/MC/D Card Associations on each transaction. Each Card Brand has a percentage assessment and a per item assessment (MC: 0.11% + $0.0185). Often, they will have their own acronyms (MC: NABU, V: AQR FEE). Your merchant service provider may or may not being passing all the Assessements thru to you, or they may be passing them thru with a mark-up. Compare the Assessments on your statement to the V/MC websites to find out.
- Processing Services: This section will typically show your discount rate charges from your interchange plus processor (0.10%, 0.05%, etc.). Usually charges will be broken down by card brand and sales volume (VISA PROCESSING: $2,500 x 0.0010 = $2.50).
- Authorizations: This section should show per authorization charges from an interchange plus provider, again broken down by card brand (V/MC/D) and/or transaction type (gift card, check processing, etc.). For example, VISA 25 x $0.10 = $2.50. These charges will sometimes be referred to as WAT or AUTH charges.
- Other Fees: This section should show all the other fees associated with the account and billed in that month, like STATEMENT/MONTHLY SERVICE, CHARGEBACK, ANNUAL, PCI, etc.
On true Interchange Plus pricing programs, Interchange and Assessment charges will be the same for all merchants as they are passed thru at cost from V/MC/D. Fees for Processing Services, Authorizations, and Other Fees, will vary from provider to provider.
Please call 1-800-758-1002 or contact us to learn more about Interchange Plus Credit Card Processing.