How To Read Your Merchant Statement

In order to read your merchant statement, you will need to become familiar with the terminology and formatting used. Fortunately, most merchant statements make it easy to review things like total sales volume and fees, it’s just about knowing where to look.

The following guide will help you break down these transactions, discover where to find them, and explain what is meant by terms like ‘Retrieval Fees’.

What is a Merchant Statement

A merchant statement is the document provided by your payment processor. It details every transaction that occurred during the statement period, which is usually the past month. Everything from how many card payments were made to the service fees you’re being charged in the statement.

A merchant statement is typically made up of the following elements:

• Transaction Summary
• Breakdown of Fees
• Monthly Charges and Adjustments
• Chargebacks and Refunds

A merchant statement is also used to reconcile with other business records; this helps ensure a company’s accounting is accurate.

From one merchant statement alone, you can piece together: sales, fees, reversals, unauthorised charges, and inaccuracies in other financial documents.

How to Get a Merchant Statement

Typically, your merchant account provider will issue merchant statements monthly. To access them, it’s usually a matter of logging in to your account through the provider’s portal, where the merchant statements typically come as a PDF file. Check for labels such as ‘Statements’ or ‘Reports’.

If you prefer physical copies, you can usually contact customer service to request a statement via mail. Alternatively, you can often request them to be sent via email.

How to Read a Merchant Processing Statement

Every payment provider has their own approach to a merchant processing statement. It’s not just the format and layout that may slightly differ, but the terminology too. The same fee can be described in multiple different ways, depending on the provider.

However, by becoming familiar with the core components, it becomes clear that all statements are very similar. Below are the core components of a processing statement.

Types of Fees Listed

Transaction Charges

Transaction fees will include the card processing fees charged on each transaction which are comprised of interchange fees, card scheme fees and the acquirer markup. Collectively these are known as the Merchant Service Charge (MSC).

• Interchange fees: Charged by the customer’s card issuer (i.e. Lloyds, HBSC) to cover handling costs, bad debt costs and the risk involved in approving the payment.
• Card scheme fees: Fees paid by card acquirers to the operators of card payment schemes such as American Express, Mastercard and Visa for the use of their services.
• Acquirer markup: Fees charged by the acquirer to cover their costs and profit margin.

Interchange and card scheme fees are fixed. These are known as the base or wholesale cost of card processing. The acquirer markup is variable and what we reduce on behalf of our clients. 

How to Read Merchant Service Charges by Card Type

The level of detail will depend on your payment provider and pricing model (see below for more information on pricing models). If you aren’t on a flat rate, the transactions will be broken down by card type using abbreviations (i.e. VS Debit for Vis Debit, MC Chip for Mastercard Chip and Pin).

If you are being charged a standard or blended rate, the fees should be split out by card type with only the total MSC rate being shown. See below for an example from Barclaycard.

Many providers will split out UK (domestic) and international cards (see below).

If you are on IC+ pricing, the interchange fee should also be separated. If you are on IC+ pricing, interchange fees and scheme fees should also be shown.  See below for an example taken from TrustPayments (IC=interchange and CSF=card scheme fee).

Authorisation Fee

The authorisation fee covers the cost of the processing provider authorising each transaction with the customer’s bank. This occurs each time a card payment is made.

Monthly Fees

• POS Terminal(s): Point of Sale (POS) terminals are the physical devices used in stores to process card payments. This cost covers the card machines, tablets, and any other hardware used to facilitate the in-store payments.
• Gateway Fees: These may be listed under the ecommerce section of the statement using the brand name of the ecommerce solution (e.g. eDPQ for Barclaycard, Authipay for AIB).
• Portal Fee: Some providers charge a fee for access to their portals or dashboard (i.e. Worldpay charges for their premium Worldpay Dashboard).
• PCI DSS Service Fees: The Payment Card Industry Data Security Standard service fee is a compliance fee that covers the cost of security within card processing systems.
• PCI Non-Compliance Fee: When a merchant doesn’t comply with PCI DSS standards, they risk being charged a PCI non-compliance fee.
• Minimum Monthly Service Charge (MMSC): If your credit card transaction volume is low one month, you may not meet the pre-agreed minimum amount fee amount. The result can be a minimum monthly service charge.
• Paper Statement Fee: This is the charge for providing physical copies of statements.

Activity Related Fees

• Non-secure transaction charge: Transactions involving more risk, such as some over-the-phone payments, may incur a charge.
• Card Not Present (CNP) Fees: This is a charge incurred for remote transactions when a physical card isn’t present, as the risk of fraud is higher.
• Chargeback Admin Fee: Some payment processors charge an admin fee when customers request a chargeback.
• Retrieval Fees: This fee comes from the process of retrieving transaction information. For example, a copy of a sales draft in the event of a dispute.

Chargeback/Reversals

• Chargeback Scheme Fee: When a customer disputes a transaction, this fee covers the costs of managing a potential chargeback.
• Refund Fee: A charge for refunding transactions.

Other Fees

• Direct Debit Fee: A fee for setting up and managing direct debit payments.

Why is it Important to Review Your Merchant Statement

Your merchant statement provides a record of all card payment transactions and fees.

This will allow you to reconcile against your own financial reporting and ensure your bookkeeping is accurate.

By studying your merchant statement, you may spot unauthorised charges and ensure your fees are in line with what was pre-agreed with the merchant account provider. It’s not uncommon to discover unexpected fees that were previously not mentioned before the contract was signed.

It should also highlight any fees that are particularly high and opportunities to make savings by switching providers or negotiating with your existing one when the contract is renewed.

How to Read Merchant Processing Statements From Popular Payment Processors

Different providers provide different levels of detail and split the fees into different sections. They often use their own terminology which often makes it hard to compare like for like.

Many will include the fees listed above plus a Settlement Summary which states the amount processed and settled each day. Some providers will also break this down by card type.

Below we give an overview of the merchant processing statements for:

• AIB
• Barclaycard
• FIS / Worldpay
• First Data / Clover
• Paymentsense
• TrustPayments

AIB Merchant Service Statements

View instructions on how to read AIB’s merchant statement here.

AIB Merchant Service lists:

• Processing Details
• Merchant Service Charge
• Fees (up to 15 fee types)
• Funding and Direct Debits

Barclaycard Merchant Service Statement

View instructions on how to read Barclaycard’s merchant statement here.

Barclaycard lists:

• Transaction Charges
• Activity-Based Charges
• eCommerce Charges
• Chargebacks
• Monthly Charges
• Other Charges
• Total Charges (Excluding VAT)
• VAT Summary

FIS / Worldpay Merchant Service Statements

View instructions on how to read Worldpay’s invoice here.

WorldPay lists:

• Charges Summary
• Transaction Charges (MasterCard, Visa, and Discover Global Network grouped and other card schemes like American Express placed in the ‘Other Acquirers’ category )
• Miscellaneous Charges (including Chargeback, Gateway Fee, Minimum Monthly Service Charge Fee)
• Premium Charges
• Total Due (including VAT, followed by a VAT breakdown).
• Number, Value, and Charges Per Transaction

TrustPayments Merchant Service Statements

View instructions on how to read TrustPayment’s merchant statement here.

TrustPayments lists the following, with some subcategories:

• Sales
• Processing Fees
• Ancillary Services
• Ancillary Fees
• Net Activity
• Opening Balance
• Settlement Amount
• Closing Balance

First Data / Clover Merchant Service Statement

View instructions on how to read First Data / Clover merchant statements here.

Clover lists:

• Total Amount Submitted
• Third-Party Transactions
• Adjustments
• Interchange Charges
• Service Charges
• Surcharge
• Chargebacks/Reversals

Daily Settlements

This is the most useful section of the statement regarding reconciliation. Here, you will find a table of the amounts deposited to your account on a daily basis.

Adjustments and Fees

There will usually be a table of fees listed in order of date, with the cumulative amount added up to see an overview of your total fees during the statement period.

Towards the end of First Data’s Merchant Statement, there will typically be a section where any less common fees and adjustments are made. For example, third-party transaction charges.

How The Pricing Model Affects The Fees Shown in a Merchant Service Statement

The pricing models offered by merchant service providers determine not only how fees are charged but also the level of transparency in the statements. The four main pricing models in the UK are:

• Fixed or Flat Rate Pricing: Like the blended pricing model, one fixed percentage fee is charged as a fixed percentage of the transaction value. The difference is that the percentage charged is the same for all card schemes and card types which typically means it is the most expensive.
• Standard or Blended: all processing costs associated with each transaction (interchange fees, scheme fees and markup fees) are bundled into one fee called the Merchant Service Charge (MSC). The MSC is a fixed percentage that varies by card scheme (i.e. Visa, Mastercard) and the card type used (i.e. debit, credit and business cards).
• Interchange-Plus (IC+): a more transparent method of separating interchange fees from the acquirer’s markup. You can see our comparison of Blended versus IC+ pricing models here.
• Interchange Plus Plus (IC++): the most transparent pricing model where all fees associated with each transaction are broken down: the interchange fee, the card scheme fees and the acquirer markup.