If you’ve ever opened your merchant statement and felt the urge to squint or sigh, you’re not alone. One of the most common frustrations business owners bring to us is the confusion around the many fees that appear on their processing statements. December is an ideal time to look more closely at these costs, because even small adjustments can make a significant difference in your bottom line for the coming year.
Now, let’s look at a few fees you might encounter on your statement. Not every processor will have all of these fees, but it’s good to understand what they are so there are no surprises.
Let’s begin with the monthly minimum fee. This fee ensures the processor earns a certain amount each month. If your business has a slower month and your regular discount fees don’t reach that threshold, the processor charges you the difference. It isn’t inherently unfair, but it should be clearly explained so you’re not surprised when your statement arrives.
Next is the statement or service fee. Some processors combine these. Others charge them separately, which we do not agree with. These fees often cover customer support and the cost of preparing and delivering your statement. Transparency matters, especially in an industry where small charges can add up quickly.
Annual fees are another area worth paying attention to. These can range from negligible to significant, depending on the processor. A trustworthy processor will always notify you before that fee appears, giving you the chance to budget and ask questions.
Regulatory or IRS reporting fees are more recent additions to merchant statements. These fees are tied to federal reporting requirements, and most merchants see them each February, along with their 1099-K. Again, a legitimate fee, but one worth understanding.
Supply programs can be helpful for some merchants, especially those who burn through rolls of paper or depend on quick equipment replacement. For others, these programs become an unnecessary monthly cost. The important thing is making the choice intentionally.
And then there’s PCI. PCI compliance is mandatory and designed to protect your business and customers. The annual fees are expected, but the non-compliance fees—charged monthly when a merchant fails to complete their questionnaire- are the ones that sting. We walk our merchants through this process to prevent those recurring penalties.
The real takeaway here is simple: fees aren’t the enemy, but confusion is. When you understand what you’re paying for and why, you’re better equipped to make strategic decisions, negotiate confidently, and protect your margin.
Next week, we’re taking this one step further by exploring the true cost of merchant services. Not just the fees, but the value of choosing the right partner altogether.
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