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.

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:

1. 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.

2. 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.

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.