Understanding the Numbers: Is Your Merchant Statement Confusing?
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It’s Time to Tackle Your Merchant Statement
As a business owner, you rely on credit card processing to facilitate smooth transactions with your customers. Accepting credit card payments allows your customers to have a safe and secure transaction, knowing that their personal banking information will not be stolen. It also allows you to be paid with next day funding while speeding up the payment process, reducing the payment cycle time of outstanding payments record. However, understanding the fees and charges associated with merchant processing can be a daunting task. If your merchant statement leaves you scratching your head, it’s crucial to gain clarity and ensure you’re not overpaying for this essential service. In this article, we will explore the importance of reviewing your merchant processing statements, offer tips for assessing fees on your own, and introduce our team at Evolve Payment—a merchant services company that can help optimize your accounts receivable process while reducing costs found on your merchant statement.
Why You Should Review Your Merchant Processing Statements
Merchant processing statements contain information about the fees and charges imposed on your business for accepting payments using credit card transactions. It lists the card type, transaction type, and the rate it was accepted. By reviewing these statements regularly, you can:
Identify Potential Overcharges: Merchant statements can be complex, and you may be unaware of hidden fees or additional charges. Regularly reviewing your statements allows you to spot any discrepancies and address them promptly.
Ensure Contract Compliance: Merchant service agreements often outline specific terms and conditions, including fees, early termination fee (ETF) clauses, and pricing structures. By reviewing your statements, you can ensure that the terms agreed upon in your contract are being upheld. If they are not being upheld, communicating with your processor about the discrepancy can often result in a positive change in your merchant processing rates.
Track Business Performance:Understanding the fees associated with your merchant processing can help you gain insights into your business’s financial health. By tracking transaction volumes, chargebacks, and fees over time, you can identify patterns, optimize your operations, and make informed business decisions. Recently, the Evolve Payment team noticed that one of our clients had a spike in chargebacks. When we presented our findings to the owners, they identified an employee that was buying products and issuing credits to their own credit card. This is a huge fraud issue! Thankfully, our risk department caught it the week it was happening, and the owners were able to act accordingly.
Steps to Understanding Your Merchant Processing Statement
Merchant processing statements can be overwhelming due to the daunting nature of financial reporting. Still, it’s important for the responsible fiduciary representative of your company to not only report on the health of your merchant processing but actually to understand what’s contained within the reports. This is especially true if you have a complex merchant account. Here are some steps to follow:
Review the Statement Format: Familiarize yourself with the layout of your merchant statement. Identify sections that detail fees, such as discount rates, transaction fees, authorization fees, monthly fees, and statement fees. All of these fees should match the original application you signed when you agreed to move forward with your provider. Your provider can give you that information if you do not have the application in your records.
Analyze Fee Categories: Categorize the fees into different types, such as processor fees (charged by your merchant service provider), interchange fees (set by card networks), and assessment fees (charged by card associations). This breakdown will help you understand which entities are involved in your payment processing.
Compare Pricing Structures: Evaluate the pricing structure provided by your merchant service provider. Understand whether you are being charged a flat rate, tiered pricing, or interchange plus pricing. Compare these rates with industry standards to assess if you are getting a fair deal. If you are operating as a business-to-business (B2B) company, you may not yet be aware of Level III data transactions, which allows you to have significantly lower transaction costs as opposed to retail or business-to-consumer (B2C) transactions.
Identify Hidden Fees: Look for any additional fees, such as software fees, “data-handling” fees, monthly partnership fees, or fees without a title. Ensure you understand what each fee represents and why it’s on your statement. There have been situations where our team was able to identify that the previous processor was charging $15 every month for “customer service” fees—something they snuck in to capture some extra money for answering their questions. Fees like this should never happen. Unfortunately for this client, they were paying that fee for 18 months until the team at Evolve Payment performed our free analysis.
How Evolve Payment Helps You Analyze Your Merchant Statement
Evolve Payment understands that deciphering merchant statements can be challenging for busy business owners like you. We offer a free analysis service to help you clarify and optimize your accounts receivable process. Here’s how we can assist you:
Comprehensive Statement Review: Evolve Payment’s team of experts will analyze your merchant statements, providing a clear breakdown of fees and charges. They can identify any potential savings or cost optimization opportunities.
Personalized Recommendations: Based on our analysis, Evolve Payment will offer tailored recommendations to reduce your overhead costs. We can suggest strategies to minimize fees, streamline processes, and improve your accounts receivable efficiency while finding some hidden gems in your merchant account.
Transparent Pricing: Evolve Payment believes in ethical pricing. We will clearly explain the fees involved and present you with a cost-effective solution tailored to your business needs. You’ll never see a predatory “customer service” fee on your statement, and you’ll always know where each line item on your statement comes from.
Bring Some Clarity to Your Accounts Receivable Process
Understanding your merchant processing statements is essential for managing your business’s financial health. Don’t let the confusion of your merchant statement cost you money! Gain clarity and optimize your accounts receivable process with Evolve Payment. Contact the team at Evolve Payment today for a FREE analysis of your merchant processing statements. Our team of experts will provide a comprehensive review, personalized recommendations, and transparent pricing solutions to help you reduce overhead costs and streamline your financial operations. Take control of your business’s financial health and unlock the potential for greater savings and efficiency.