Credit card processing can feel complicated, but a business owner does not need to become a payment-industry expert to ask better questions.
A recent processing statement can reveal how the business is priced, what it is paying each month, whether equipment charges are included, and whether the current setup still fits how customers pay.
Start with three important areas.
1. Understand What Makes Up the Rate
There are hundreds of possible pricing combinations because costs can vary by card type, transaction method, and how the payment is processed. Interchange is the underlying cost associated with the card transaction before the processor’s pricing and other transaction or monthly charges are added.
A business does not need to memorize every interchange category. It does need to understand that a debit card, rewards card, business card, card-present transaction, manually entered payment, and online payment may not cost the same to process.
This is especially important for automotive businesses and other companies with larger average tickets. A customer paying for a major repair may use a rewards card, while a smaller purchase may be paid with debit. The mix of cards affects the statement.
2. Know Your Effective Rate and Your Typical Card Mix
The effective rate gives a quick way to view the overall cost of processing for the month.
Total monthly processing fees ÷ Total monthly card sales = Effective rate |
For example, if a business paid $300 in processing fees on $10,000 in card sales, the effective rate would be 3.00 percent.
Comparing the effective rate from month to month may help a business notice changes. A higher effective rate does not automatically mean something is wrong. The card mix, transaction method, average ticket, refunds, chargebacks, monthly fees, and changes in volume can all affect the result. It does mean the owner has a reason to look more closely.
3. Look Beyond the Percentage
A statement review should not focus only on one advertised rate. Business owners should also look for monthly service fees, transaction charges, statement fees, PCI-related charges, batch fees, gateway costs, equipment leases, software subscriptions, and services that are no longer being used.
The terminal itself should also be reviewed. Is the business paying a monthly equipment charge? Does the terminal accept the payment types customers expect? Is it reliable? Does the device fit where customers actually pay?
A Worthy Partner Explains the Full Picture
Cheri’s original advice remains important: be sure you have a worthy partner and processor. A strong partner should provide honest recommendations, explain pricing clearly, help the business understand its statement, and offer support when challenges arise.
A review does not require the business to change processors. It can confirm that the current provider, equipment, funding, service, and pricing remain a good fit. It may also identify unnecessary monthly charges, older equipment expenses, or higher-than-expected processing costs.
Depending on the current pricing and fee structure, TMC statement reviews may identify potential savings of up to 20 to 25 percent. Every business and statement is different, so savings are not guaranteed.
A Simple Next Step
1. Gather one recent, complete processing statement. 2. Use the TMC Rate Calculator to estimate the effective rate. 3. Submit the statement securely for a complimentary, no-pressure review. 4. Review the findings before deciding whether any change is worthwhile. |
Know What You Are Paying Calculate the effective rate, then submit a complete statement for a complimentary, no-pressure review. |
Subscribe To OurBlog
Join our mailing list to receive the latest news and updates from our team.