Statement decoder

The part of the fee that goes to the bank that issued your customer the card.

Interchange is the wholesale cost of accepting a card. Visa and Mastercard set it, every processor pays the same amount, and nobody can discount it. It changes depending on the card: a basic debit card costs less than a premium rewards credit card.

What to do: Nothing. Nobody can get you a better interchange rate. What you can compare is the markup on top of it.

A small cut the card network itself takes on every sale.

Separate from interchange. Interchange goes to the customer's bank; assessments go to Visa, Mastercard, Amex or Discover. Like interchange, it is the same for everyone and cannot be negotiated.

What to do: Nothing, but it should appear as its own line. If it is bundled into one big rate, you cannot see what your processor is adding.

Charged when your customer's card was issued in another country.

Set by the card networks and applies even when the sale is in your own currency. Tourist-heavy businesses and online sellers see it most.

The charge for Canadian debit, which is priced per sale rather than as a percentage.

Interac is Canada's own debit network and is not Visa or Mastercard. Because it is charged as a flat amount per sale, it is usually the cheapest way to take a large payment in Canada.

What to do: If you sell big-ticket items in Canada, check you are not steering customers away from debit.

A Mastercard per-transaction charge in the United States.

Charged on authorizations. It appears as its own line on an interchange-plus statement and is hidden inside the rate on flat or tiered pricing.

A monthly Visa charge in the United States, based on your type and number of locations.

Unusual because it is monthly rather than per sale, so it lands even in a month when you take almost nothing on Visa.

What your processor adds on top of the wholesale costs. This is the only part that is negotiable.

On an interchange-plus statement this is printed plainly, usually as a percentage plus a few cents per sale. On flat-rate or tiered pricing it is hidden inside one blended number.

What to do: This is the number to shop around on. Everything else is the same wherever you go.

The percentage taken out of each sale. Nothing to do with discounts for customers.

A confusing name for the main percentage fee. It is called a discount because the money is deducted from your deposit rather than billed to you.

On tiered pricing, the cheapest bucket. Usually a basic card, tapped or inserted in person.

Tiered pricing sorts every sale into qualified, mid-qualified or non-qualified. Your processor decides the rules for which sales land where. Seeing this word on your statement means you are on tiered pricing.

What to do: Check what share of your sales actually qualifies. If most of them do not, the advertised qualified rate was never the rate you were going to pay.

The middle bucket on tiered pricing. Costs more than qualified.

Sales often land here because the card was a rewards card, or because it was keyed in rather than tapped. The rules are set by your processor, not by the card networks.

The most expensive bucket on tiered pricing.

Corporate cards, business cards, international cards and manually keyed sales frequently end up here. If a large share of your sales are non-qualified, your real cost is nowhere near the rate you were quoted.

What to do: Add up what percentage of your volume lands in this bucket. It is often the single biggest reason a bill is higher than expected.

A sale that got moved into a more expensive category than you expected.

Usually happens when a card is keyed in by hand, when a sale is settled late, or when extra data the network wanted was missing.

What to do: Ask which specific rule caused the downgrades. Settling your batch every day fixes a surprising number of them.

A few cents charged every time a card is checked, whether the sale goes through or not.

Charged on the authorization, not the sale. Declines, pre-authorizations and tip adjustments can each trigger one. Small businesses with small average sales feel this far more than the percentage rate.

What to do: If your average sale is under about the price of a coffee, work out what these cost you per month. It is often more than people expect.

Charged each time you close out the day and send your sales for payment.

Usually once a day. If you run several terminals and each one batches separately, you can be paying this several times a day without realising.

What to do: Count your terminals and multiply. Then ask whether they can batch together.

A small charge for checking a customer's billing address on a card-not-present sale.

Used on phone and online orders to reduce fraud. Charged per check, so declines cost you too.

A flat monthly charge for producing your statement.

Charged whether you accept one sale or a thousand. Some providers still charge it even when you only get the statement by email.

What to do: Ask for it to be removed or reduced. It is a common goodwill concession.

If your fees for the month come to less than a set amount, you are topped up to it.

Designed so a quiet month still earns the processor something. It hurts most in slow seasons, which is exactly when it hurts most.

What to do: If your business is seasonal, check your quietest month rather than your busiest.

A charge tied to the card industry security rules that every business taking cards has to follow.

PCI DSS is a real security standard, set by the card networks. The annual questionnaire is usually free to complete. The fee your processor charges is a separate thing that they set themselves.

What to do: Ask exactly what the fee pays for, and whether it includes the scanning service or just the paperwork.

A monthly penalty charged while your security questionnaire is out of date.

Often starts quietly after a renewal deadline passes and keeps charging every month until the form is filled in. Plenty of merchants pay it for years without knowing why.

What to do: If you see this, complete the questionnaire, then ask for a refund of the months you were charged. Refunds are sometimes given.

A monthly charge for the software that carries online card payments.

Applies to e-commerce and to keyed-in phone orders. Sometimes billed by your processor, sometimes by a separate company, which is why it can be missed when people add up their costs.

What to do: Check whether you are paying for a gateway you no longer use.

A once-a-year charge that often arrives without warning.

Easy to miss because it only appears on one statement out of twelve. Sometimes it is a separate line, sometimes it is folded into a month with several other charges.

What to do: Look back at the same month last year. Annual fees repeat on a schedule.

Charged when a customer disputes a sale and their bank claws the money back.

You pay the fee for handling the dispute whether you win it or lose it. Losing also costs you the sale itself and anything you shipped.

What to do: Keep receipts and delivery proof. Most disputes are won or lost on paperwork.

Charged when a customer's bank asks for a copy of a receipt.

A step that sometimes comes before a full chargeback. Answering it quickly and completely can stop the dispute going further.

Money your processor holds back from your deposits as protection against future refunds.

More common for new businesses, for high-risk industries, and for anything sold well before it is delivered. The money is usually released later on a set schedule.

What to do: Get the release schedule in writing before you sign.

A monthly charge for the card machine itself.

Usually cancellable when you leave, unlike a lease. Over several years renting can still cost far more than buying the same machine outright.

What to do: Ask what the same terminal costs to buy, then divide by your monthly rental to see the break-even point.

A fixed-term contract for your card machine, usually with a separate leasing company.

This is the one to read carefully. Leases are often non-cancellable, frequently run for several years, and commonly survive you leaving the processor, so you can end up paying for a machine you no longer use.

What to do: Find the lease paperwork and check the end date and whether it renews automatically. Leaving your processor does not usually end the lease.

A monthly charge for the mobile data connection in a portable terminal.

Applies to terminals you carry to the table or to a job site. If the machine sits on WiFi all day, you may be paying for a connection it never uses.

What to do: Check whether your terminal is actually using mobile data.

A charge for leaving before your contract ends.

Sometimes a flat amount, sometimes calculated from the profit the processor expected to make over the rest of the term. The second kind can be large.

What to do: Ask for the exact amount in writing before you switch. Some providers will cover it to win your business.

Charged when a sale is converted between currencies.

Dynamic currency conversion, where the terminal offers the customer their home currency, is a related but separate thing. It can earn you a small share, but it costs your customer more and some of them notice.

An extra amount added to the customer's bill when they pay by credit card.

The rules are strict and differ between Canada and the United States, and in the US they differ by state. There are limits, notice requirements and registration steps, and debit cards are treated differently from credit cards.

What to do: Check the rules that apply where you are before you switch this on. Getting it wrong can cost you your merchant account.

Advertising a higher price and taking money off for cash, rather than adding a fee for cards.

Often sold as a way to eliminate processing costs. Whether a given programme is genuinely a cash discount or a surcharge wearing a disguise depends on exactly how the prices are displayed.

What to do: Ask to see how the price will appear on your shelf, your menu and your receipt before agreeing to anything.

A charge for getting your money sooner than the standard schedule.

Sometimes a flat monthly fee, sometimes a percentage of each deposit. A percentage-based version can quietly become one of your larger costs.

What to do: Work out what it costs per month. Then decide whether the faster cash is worth that much to you.

A charge for safely storing a saved card so you can bill it again later.

Used for subscriptions, memberships and anywhere you keep a card on file. Usually a small charge per stored card per month, which adds up as your customer list grows.