A BOLD Merchant Statement Breakdown: Part Two

by Nichole Kazenske | May 12, 2021

This post is a continuation of a two-part blog series on Merchant Statements. We discuss what every processor should know about statements, how to uncover hidden fees, and a sneak peek into the BOLD. Statement Analysis process.

As mentioned in part one of this blog series, it is key for both the merchant and the processor to remember that every statement looks different. They can come in different formats or sizes while also using varied terminology or abbreviations. Bottom line, the best thing you can do as a processor is know what the rates are and what they should be. And as you’re looking through your statement, you can see what doesn’t match up. You discover the padding if things don’t match up.

Uncovering Hidden Fees

Typical ways processors are able to pad hidden fees is primarily through interchange. Due to a lack of transparency, deceptive statements make it difficult to identify hidden fees, and therefore, make it easy to fall into its trap. This brings us to a very important question: Are there any tricks to uncovering hidden fees? Gary Liu, President of ISV/VAR Channel for BOLD., says, “At the end of the day, it’s not a trick… it’s math.” Below, you can find links to Visa and Mastercard’s Interchange breakdown.

VISA USA INTERCHANGE REIMBURSEMENT FEES

MASTERCARD 2021-2022 U.S. REGION INTERCHANGE PROGRAMS AND RATES

A Transparent Approach

At BOLD, we start our statement analysis with math. We take a look at four different sectors of fees: Processing fees, Authorization/Transaction fees, Monthly fees, and Interchange. We take the first three fees and subtract them from the total effective rate to determine whether or not hidden fees exist.

Next, we match what the merchant is currently being charged to give our partners insight as to what profit would look like if it remained the same. With that, we also offer the freedom to modify what the merchant’s statement looks like. Whether it’s a simple adjustment or completely cutting out something, we want to give a broader perspective on ways the partner could save the merchant money while maximizing their profitability.

After receiving a statement, our team will provide an analysis and proposal within 48 hours. To receive your Statement Analysis, submit a case below with your attached statement or email our PRM team at prm@boldpay.io.

Ready to Learn More?

Building An Attrition-Proof Book of Business

by boldpay | May 10, 2021

Join Gary Liu, President of ISV/VAR Channel, as he sits down with James Shepherd, CEO and Founder of CCSalesPro, to discuss building a powerful, attrition-proof portfolio.

CLICK THE IMAGE BELOW TO WATCH THE VIDEO

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BOLD Payments Merchant Statement Breakdown: Part One

by Nichole Kazenske | May 6, 2021

This post kickstarts a two-part blog series on Merchant Statements. What you will discover here is something every merchant should know about statements, a breakdown in pricing structures and how interchange can affect them, as well as a BOLD Statement Analysis.

EVERY STATEMENT IS DIFFERENT

If you are a merchant, it is important to keep in mind that every statement will look different depending on who the processor is. Some statements may be easy to read and comprehend, while others may appear confusing. In some cases, for merchants who have used the same processor for years, it’s more challenging to identify whether or not their statements could be worse for better. Perhaps it’s because using the same processor is comfortable, or it truly is the best deal. At the end of the day, it’s simple: You don’t know what you don’t know.

WARNING: IT MAY BE CONFUSING

When reading a statement, two of the most confusing things that pop up are the structure of the statement itself and understanding interchange. Here is a breakdown of merchant pricing structures and how an increase in interchange can affect them:

1. Flat Rate Pricing– Flat rate pricing is one rate on transactions provided by the merchant processor/partner for all transaction types (manually keyed, swiped, moto, etc) and usually does not change when interchange fluctuates. Unless the merchant processor/partner decides to increase the merchant fees to offset the cost, a merchant on flat rate pricing will feel no effect of a rise in interchange rates.

For an accurate cost comparison when quoting a merchant for flat rate, it is vital to specifically compare the merchant’s True Effective Rate to their new rate.

HOW TO FIND THE TRUE EFFECTIVE RATE

Total Credit Card Fees / Total Credit Card Sales

The True Effect Rate is determined by dividing the merchant’s TOTAL credit card fees by their TOTAL credit card sales. For example, a merchant who pays $1,250 in total credit card fees runs $50,000 in credit card sales has a True Effective Rate of 2.50% ($1,250/$50,000)

2. 3 and 4 Tier Pricing– A merchant paying rates based on tiers will also not feel the effect of a rise in interchange. In this scenario, a merchant processor has given the merchant 3-4 rates based on the transaction type (i.e.- the merchant will experience a higher rate when a transaction is manually keyed as opposed to swiped/dipped). As interchange fluctuates, the tiers remain the same.

3. Interchange/Cost Plus Pricing- The most common rate structure offered by merchant processors, Cost Plus Pricing is based solely on the rate of interchange with an additional markup for the merchant processor. In this scenario, the merchant’s rate will fluctuate with interchange while the fees to the processor remain the same.

TAKEAWAYS:

Be curious. | You don’t have to make a switch right off the bat. However, asking questions and gaining better understanding of other available options will help clear the path in deciding what is best for you and your company.
Be confident. | The last thing you want is for your business to be taken advantage of due to misunderstandings. Familiarize yourself with the terms above and if anything on your statement seems confusing or out of place, bring it to the processor’s attention.

A ONE STOP SOLUTION

While it’s easy to get tripped up in the tiny details and hidden fees of merchant statements, at BOLD, we provide a transparent Statement Analysis. First, we match what the merchant is currently being charged to give our partners insight as to what profit would look like if it remained the same. We then provide input on areas of the statement where the partner can save the merchant money while maximizing their profitability.

Continue Reading Part II Here