Merchant services

Merchant Services - How To Understand Your Monthly Statement

merchant services

Although shopkeepers and business owners are always experts in their industries, when it comes to merchant services, and more specifically monthly statements, things tend to get a little more complicated. Typically when it comes to merchant services monthly statements between the interchange fees, services fees, chargebacks, and any additional adjustments, something jumps out and requires a second look, even a call to your merchant services provider. With a breakdown of your merchant services monthly statement, all the information and numbers that may cause you to spend an hour trying to decipher, will now be less time consuming, and much less stressful.

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When it comes to merchant services, it is all about the exchange of money. Customers pay, either online or through a virtual terminal, or payment terminal for goods and services using a credit card, or debit card. Throughout this process, once the customer pays for the goods and services, and the merchant provides the goods or services ordered, there is a merchant services process that is assessing fees and charges for each transaction made. I have broken down a monthly statement into 3 sections that will help determine how your merchant services monthly statement reads and how it affects your business's bottom line.

Of course, all merchant services providers outline their monthly statements differently, with different verbiage, but for the most part, all must outline the main fees and services that will be outlined below. This should serve as a general guide to your merchant services monthly statements.


This should be the easiest part of the monthly statement to interpret, however more times than not it is the most complicated part because it uses deposit and refund interchangeably. The adjustments often refer to merchants that have a cash reserve in an account. Within this account, the merchant services provider typically holds the funds until a customer’s payment is processed.

Once the payment is processed, the merchant services provider will request those funds from the customer's issuing bank. At the same time, the merchant services provider will subtract an amount equal to that of the transaction from the cash reserve account. This process is illustrated as a deposit on a monthly processing statement. Reserve accounts usually are required for businesses that have future deliveries, some risk associated with their shipping process, previous history of merchant services that may be seen as a risk, and is done to protect the merchant services provider, and the business owner.

If you receive an adjustment, deposit or refund, just make sure that they balance out. However, do not be surprised if the transactions to do not equal every time. Depending on when the transaction was done, the deposit may be on this month’s statement, and the refund will show up on the next month.

Interchange Fees

The interchange fee is representative of the merchant service providers cost for processing a credit card transaction. Every merchant services provider is part of card associations, Visa and MasterCard. These associations maintain, govern and aid credit card merchant services, and they set the minimum interchange fees that can be accepted. It is then up to the merchant services provider to build a program that incorporates the minimum costs set by the card associations, which will allow you to accept credit cards at your business for a fee. Interchange rates can vary from one merchant services provider to another, all merchants pay some sort of interchange fee, and it reflects on your statement based on the type of credit cards you have accepted that month, what rate you are at, and how many transactions that you did.

The higher, more elite types of credit cards hold higher interchange rates, and MasterCard is typically higher than Visa. 

Chargebacks and Reversals

One of the final sections of your merchant services monthly statement will deal with chargebacks. When a customer decides to make a purchase with their credit card, either online, or in your store, and later on she is unhappy, or there was a problem with what she purchased or perhaps they have buyers remorse, they can call their credit card company and dispute the charge. It doesn't matter if the customer is right or wrong, the credit card company will refund their card, and the merchant services provider will chargeback your merchant account. 

You will have a change to redeem yourself. If you challenge a chargeback and you win, your merchant services provider will prominently display your reversal on your statement.

If you have any questions regarding your monthly statement, always inquire with your current provider, or look into a program from a different merchant services provider that may be better suited for your business.


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Matt Moore

As the President and Co-Founder of BNA Smart Payment Systems, Matt is responsible for the company’s strategic direction, daily operations, and growth. Entrepreneurial by nature, he brings a wealth of sales and marketing experience earned from over 36 years in business. He has developed, implemented, and directed international sales and marketing strategies, established strategic alliances with international companies, and demonstrated leadership in the electronic payments market. Prior to BNA, Matthew served at the senior levels of major EFT/POS companies, helping them increase sales and optimize customer service. Matt is also a father of three, a fitness enthusiast who does power lifting and CrossFit, and he enjoys weekends at the cottage.

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