Merchant 101: Understanding Credit Card Statement Fees

Merchant 101: Understanding Credit Card Statement Fees

If you’re like many merchants, your credit card statement can feel like it’s written in a foreign language. However, credit card processing is one of your largest business expenses, so it’s important to know what these fees mean, and that you’re being charged fairly. Tidal is committed to complete transparency, so we’ll explain the common fees here and tell you when to beware. We’ll also give you a free, no-obligation statement analysis so you can see how Tidal helps you save.

Card Association Fees

These are standard fees charged by each card association. They are “set in stone” and should be passed through to you with no additional markup. Remember, there is nothing a processor can do to save you money on these fees. If they’re charging you less, they’re making up the difference somewhere else. Since many of these fees are just a fraction of a penny, some processors combine them and add a markup. Tidal never marks up card association fees.

Also, when you compare our statement and yours side-by-side, your current processor may list fewer fees, making it seem like we charge more. But in reality, they often group fees to mark them up, and ours can be much lower. Tidal doesn’t play hide-and-group. We charge true pass-through costs.

Average Interchange Fees – The average you pay in interchange fees each month.

Assessment Fees – This is one of the first things we check in your Statement Analysis because it’s where we see the most markups. Often, companies add basis points. If you’d like to see if you’re being charged fairly, just google “Visa Assessment fee,” “MasterCard assessment fee” or any other variation. With Tidal, assessment fees are always a true pass-through cost.

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Processor Fees

Discount Rate – This is the percentage you pay to cover the processing services. In other words, this goes to the processor, not the card association. Tidal keeps our processor fees low so more of your money stays where it belongs—in your pocket.

Authorization Fees – This is the fee Visa®, MasterCard®, Discover® or American Express® receives every time you swipe a card, whether it’s approved or declined. Typically, it’s 10 to 20 cents per transaction. If you have a high number of declines, we’ll find out why. Perhaps your customers are making online purchases, which tend to have more declines due to security measures. We’ll take a look at authorization fees and declines, to help you reduce declines and increase sales.

PCI Non-Compliance Fees – The Payment Card Industry (PCI) has strict compliance rules. It requires you to take an annual survey to ensure that your business is protected. If you don’t, you’ll be charged a monthly fee until you do. Tidal usually gives merchants a few months to take this survey. Other processors aren’t so gracious. Some charge the fee immediately and it’s almost 100% profit. Tidal gives you extra time, and helps you minimize these fees.

Statement Fees – Some processors combine several fees, so it looks like you’re paying less. And by the way, this fee has nothing to do with whether you choose paper or online statements. They are charging you for the work that goes into generating a statement and putting it in a readable format. Tidal charges an honest, realistic statement fee.

Red Flags

“Creative” Processor Fees – Occasionally, processors make up their own fees. For example, we recently saw a statement with an “interchange clearing fee.”

Jacked-Up Assessment Fees – We mentioned this earlier and it’s worth repeating. Make sure you’re being charged what the card association actually charges.

Fluctuating Discount Rate – It can bounce around. They might even inflate it until you question it and then say their costs went up. It’s standard for companies to say they can raise rates at any time (we say it, too), but be safe and read the fine print. Because they may be counting on you not noticing.

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Transparent … and Ready to Help

We hope this helps you make better sense of the fees you’re paying and where you can save. It’s always the perfect time to ask us to prepare a free Statement Analysis for you!

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