Common merchant statement fees, and which ones to question

The most common merchant statement fees fall into three groups: pass-through costs from the card networks, fees your processor sets, and event-based charges such as chargebacks. Only the second and third groups vary between processors, so sorting each line into one of the three is the fastest way to see what you’re really paying.

Common merchant statement fees go by different names at different processors, but the underlying charges are similar almost everywhere. This guide groups them so you can match the labels on your own statement.

Group 1: pass-through costs

These are charged on every card transaction no matter who processes it. On Interchange-Plus pricing they appear at cost. On flat-rate and tiered pricing they’re bundled into your rate.

Fee	What it is	Who keeps it
Interchange	Percentage plus per-item fee by card type	The card-issuing bank
Assessments or dues	Percentage of volume charged by the card brand	Visa, Mastercard, Discover or American Express
Network or brand fees	Per-transaction and other card-brand fees	The card brand
Cross-border fees	Extra fees on cards issued outside the U.S.	The card brand

Our guide to card network assessment fees covers the network lines in more detail. One caution: some processors use network-sounding names for their own fees. If you can’t match a line to a card brand, ask.

Group 2: fees your processor sets

Fee	What it usually covers	Questions to ask
Markup or discount rate	Processor percentage above cost	Can it change during the term?
Per-transaction or authorization fee	Charge per sale or approval attempt	Does it apply to declines?
Batch or settlement fee	Charge per daily close-out	Is it per batch or per terminal?
Monthly service or account fee	Fixed monthly charge	What does it include?
Statement fee	Producing the monthly statement	Is an online statement free?
Monthly minimum	Charge if fees fall below a floor	Which fees count toward it?
Gateway fee	Online or virtual terminal processing	Monthly, per-transaction or both?
PCI program fee	Compliance portal and support	What is included?
PCI non-compliance fee	Charged when validation is missing	How do I make it stop?
Annual fee	Once-a-year charge	Which month is it billed?
Equipment rental or lease	Terminal or POS hardware	Is it a separate lease contract?

Not all of these are a problem. Many are reasonable charges for real services. What matters is that you can see them, they match what you were quoted and they don’t quietly grow. For the full picture, add them together and compare the total, not each line. See monthly minimum fees and non-compliance fees explained for two that often surprise merchants.

Group 3: event fees

These apply only when something specific happens:

• Chargeback fee: charged when a customer disputes a sale with their bank. The disputed amount is also taken back unless you win the dispute.
• Retrieval or inquiry fee: charged when the issuing bank requests documentation about a sale.
• Voice authorization fee: charged when a sale is approved by phone instead of through the terminal.
• ACH reject or returned debit fee: charged if the processor can’t collect fees from your bank account.
• Account change fees: some processors charge to change bank accounts or other details.

Event fees vary widely between processors. If your business sees regular chargebacks, the chargeback fee matters more than a small difference in markup.

An example

Here is a hypothetical example with round numbers, for illustration only. Say a statement shows $1,000 in total fees on $35,000 in sales. Sorting the lines might show $700 in interchange and network fees (Group 1), $250 in markup and fixed fees (Group 2) and $50 in chargeback and retrieval fees (Group 3). The $700 would be similar at any processor. The $250 and the $50 are the numbers to compare and question.

Sorting a statement this way the first time can take half an hour. After that, it gets quick, because the same lines appear every month. Keep a simple list of your Group 2 fees with their amounts, and check it against each new statement. Anything that wasn’t on the list last month deserves a look, and anything that grew without explanation deserves a question.

If your statement uses tiered pricing, the sorting is harder, because Group 1 and part of Group 2 are blended into the qualified, mid-qualified and non-qualified rates. In that case, separate the fixed fees you can see and use your effective rate to judge the rest.

Fees worth a phone call

• Any line with a vague label such as service, regulatory, compliance or technology fee and no clear explanation.
• A PCI non-compliance fee that has run for more than a month or two.
• A new line that wasn’t on last quarter’s statements.
• A rate that changed without a notice you remember.
• Equipment charges for hardware you believed you owned.
• Any fee labeled as a network fee that you can’t match to a card brand.

Fee names differ between processors, and some processors combine several of these into a single line. If you can’t tell what a fee is for, that is a fair question to ask, and you’re owed a clear answer.

What PayZoom does

Our free statement analysis sorts every line on your statement into these groups and gives you a plain-English answer about what you’re paying and to whom. If your current setup is fair, we’ll say so. Merchants who move to PayZoom get Interchange-Plus pricing with our margin on its own line, no early termination fees and no non-compliance fees, and a real person to call about any line on the statement. See our pricing for how it works.