Understanding your merchant statement is essential for controlling costs and ensuring your business receives the best possible rates on card payment processing. However, these statements are often complex and filled with industry-specific terminology. This guide will help you interpret your merchant statement with confidence.
1. Preparation
Effective analysis begins with preparation. Set aside uninterrupted time in a quiet environment with your merchant statement, a notepad, and a pen. Approach this process methodically to ensure you capture all relevant details.
2. Reviewing the Statement Overview
The first page of your merchant statement typically presents a summary of charges. While the terminology may differ between providers, most statements will include the following categories:
- Interchange Fees: Fees paid between banks for the acceptance of card-based transactions.
- Scheme Fees: Charges paid to card schemes such as Visa and Mastercard for processing card types.
- Additional Charges: These may include card machine rental, PCI DSS compliance fees, and charges for paper statements.
- Premium Charges: For example, Worldpay uses this term for non-standard consumer card transactions.
Understanding these categories is the foundation for accurately assessing your costs.
3. Deciphering Card Types and Acronyms
Merchant statements are often filled with acronyms related to card types. Familiarity with these terms is crucial:
- VDBT: UK Visa Debit
- VIEL: Visa Electron
- MCPD: MasterCard Premium Debit
- MDUK: MasterCard UK Maestro
Identifying the card types your customers use most frequently will help you understand the associated charges.
4. Navigating Industry Jargon
The payments industry uses a variety of terms to describe different transaction types and fees. Key examples include:
- CNP (Customer Not Present): Transactions where the cardholder is not physically present, such as online or telephone orders.
- Non-Secure Transaction: Typically refers to CNP transactions, as used by Barclaycard.
- Non-Qualified Fee: Applied when a CNP transaction is processed through a customer-present account (common with First Data and Cardnet).
- Exception Fee: Charges for non-standard consumer card transactions.
- DIAL AUTH / UK Base 24: Terms used by Elavon and GlobalPay for authorisation fees.
- MOTO Fee: Fees for mail order and telephone order transactions.
- PCI DSS: Payment Card Industry Data Security Standards—mandatory compliance for all merchants.
Understanding these terms is vital for accurate interpretation of your statement.
5. Interpreting Rates
Merchant statements often present rates in a format that can be confusing. For example, a rate shown as 0.002220% actually represents 0.22%. Similarly, a rate of 0.01225% equates to 1.225%. In the next step, you will find a link to a free statement decoder and quote generator that allows you to enter the digits exactly as you see them on your statement.
6. Next Steps: Put Your Knowledge to the Test
Merchant statements vary in format and terminology across providers, making interpretation challenging even for experienced business owners. To make this process easier, Nexpay offers a Free Quote Calculator that enables you to apply your new understanding and instantly compare your current fees with the best rates available.
If you have questions or would like expert assistance in reviewing your statement, our team is here to help. Please contact us for professional support.
Ready to see how your rates compare? Test your knowledge now with our Free Quote Calculator.
