Understanding Merchant Statements: A Guide for Retailers

a graphic showing a business owners looking at a laptop and a tablet with money signs in the background

Key Takeaways:

  • Retail businesses should aim to fully comprehend merchant statements to uncover hidden fees behind competitive rates.
  • Select a payment processor that offers clear statements, real-time information access, and alignment with your business’s financial needs.
  • Choosing between Interchange Plus and Flat Rate will affect how your fees are presented on merchant statements.

In the world of retail payment processing, businesses demand straightforward financial information. Deciphering processing statements, navigating various fee structures, and conducting comparisons among companies are crucial to pinpoint the best financial match for your business. 

This article will explain how to read merchant statements, the importance of transparency, and why statements can differ depending on your partner.

Breaking Down the Money Puzzle 

Payment companies sometimes position themselves as having “the lowest rate out there,” but there’s usually more to it. While the headline rate may be competitive, ancillary charges or fees are often concealed within the statement. 

Processors typically present rates to retailers in terms of percentages or in terms of dollar amounts. Some processors will quote their rate based on a percentage of your total business volume. Others will quote on a per-transaction basis. Most companies mix both, for example, a 1.9% flat rate plus 10 cents per transaction. 

Understanding all the terms on a monthly statement is crucial. For instance, the statement may list “chip,” which signifies that the credit card was physically present during the transaction. This rate is usually consistent whether the card is swiped, the chip is inserted, or contactless payment is made. However, you may get hit with higher fees for Card Not Present (CNP) transactions due to the potential risk of fraud. 

Weighing Processing Options

For retailers weighing their payment partner options, it is imperative to compare and contrast processing rates. In a testament to their dedication to transparency, payments processor BlockChyp developed a simple tool for pricing comparison and statement analysis. This tool is accessible to everyone at no cost and is completely anonymous. Simply input your monthly volume and transaction count to initiate a straightforward estimate.

Two Main Fee Structures: Interchange Plus vs. Flat Rate Pricing

Interchange Plus and Flat Rate pricing are two common models in the payment processing industry. Each has advantages and drawbacks. Ultimately, the decision between interchange plus and flat rate pricing in the retail sector depends on the specific needs and transaction characteristics of the business.

Unsurprisingly, the choice between interchange plus and flat rate pricing significantly influences how payment processing costs are presented on merchant statements.

Interchange Plus

Interchange Plus pricing is characterized by transparency, as it separates interchange fees set by card networks from the processor’s markup. Larger retailers often favor this model with higher transaction volumes, allowing for more cost control and potential savings.

With Interchange Plus pricing, statements typically display a detailed breakdown, delineating the interchange fees, card association fees, and the processor’s markup separately. This transparency allows retailers to precisely understand the components of their transaction costs, aiding in strategic decision-making and cost optimization.

However, the detail and intricacy of Interchange Plus merchant statements can cause a headache for small businesses looking for a straightforward solution. We will cover more on this in the next couple of sections.

Flat Rate

On the other hand, Flat Rate pricing simplifies billing by charging a fixed percentage and/or transaction fee. This can be advantageous for smaller retailers with predictable sales patterns. Flat Rate pricing is generally much easier to read and comprehend.

Nonetheless, flat rate pricing may not be as cost-effective for high-volume transactions, making it crucial for retailers to evaluate their sales volume and transaction types carefully.

Merchant Statements can be Complicated and Confusing

Many payment processors offer merchant statements that are unnecessarily complex. With Interchange Plus, numbers and figures can often be overly complicated for small businesses. As previously mentioned, you will be presented with:

An array of confusing interchange charges.

Providers often include pie charts and diagrams, pile on extra pages, and add unnecessary information that leaves business owners scratching their heads. They tend to provide unnecessary features and confusing fees. Here are some examples:

Pie charts offering sales data and trends that are already available in your POS software.

Updated policies with convoluted and complex new fees.

Look for Clear and Simple Statements

Monthly statements shouldn’t give you a headache. The best processing companies provide statements that are just 2-3 pages yet provide a concise and comprehensive overview.

BlockChyp uses Flat Rate pricing. This simplifies the statement by amalgamating all fees into a single percentage or transaction fee. Below is an example of a merchant statement from BlockChyp. You can see the two areas with Flat Rate pricing:

The first one in the green box is the total effective rate of 2.3%, which includes all the $0.10 per transaction fee.

The second one with the blue box is the 1.9% rate.

Access Your Transaction Data Info Anytime 

In the cloud-based retail ecosystem, businesses demand real-time access to all of their data. Your payment partner should make it easy. Having the ability to access real-time transaction info and check your statements 24/7 is a must. 

Downloading statements for offline use or turning data into files for your systems should be a breeze. Don’t forget that the billing cycle should also be crystal clear, with no surprise charges throwing you off.

Pick a Transparent Partner 

Selecting a payment processor can be overwhelming, but prioritizing transparency is the cornerstone of a long-term partnership. When comparing companies, ask for a monthly statement, calculate and understand the total fees you should expect, and ensure their platform empowers you with information.

Your statement should be easy-to-understand with no hidden surprises, like this example:


Understanding the intricacies of rates, fees, and the overall statement structure allows you to make an informed decision. Partner with a payments processor aligned with your financial objectives and who has your back so you can focus on running your business.

Korona gives you the freedom to choose your merchant services provider inside your POS and be in total control of your fees.

To learn more about KORONA POS and our payment processing solutions, click the link below!

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Written By

Shane Ortale

As a history enthusiast, Shane loves reading and writing. He blogs about small businessmarketing and cloud based POS. He is also an avid bird watcher, and Liverpool FC fan.