By George Mayo, owner of NJ POS Systems. Published October 26, 2026.
A merchant statement is the monthly report from your card processor showing what you sold on cards, what you were charged, and how those charges were calculated. Three numbers tell most of the story: total volume, total fees and the effective rate.
Statements are designed to be skimmed, not read. Here is the ten minute version we use when an owner hands us one across the counter.
What is the effective rate?
Your total fees divided by your total card volume, as a percentage. If you processed 50,000 dollars and paid 1,600 dollars in fees, your effective rate is 3.2 percent. It is the one number that lets you compare any two statements or quotes.
Find total volume (sometimes labeled net sales or gross sales) and total fees (sometimes split across several summary boxes). Add every fee, including the monthly ones, before you divide. Processors that quote a low rate often make it up in the fixed lines.
What are the fee categories?
Interchange, which the card networks set and the card-issuing banks receive; assessments, which the networks keep; the processor's markup; and fixed monthly fees such as statement, PCI, gateway and equipment charges.
Interchange and assessments are the same for every processor. The markup and the fixed fees are where quotes differ, and they are the only parts a new provider can actually change.
Which lines are red flags?
A PCI non-compliance fee, non-qualified or mid-qualified downgrades, batch fees, annual fees, monthly minimums, equipment lease lines and an early termination clause buried in the agreement.
- PCI non-compliance: usually means a questionnaire was never completed; it is avoidable.
- Non-qualified or mid-qualified: tiered pricing that moves ordinary transactions into expensive buckets.
- Equipment lease: paying monthly, often for years, for a terminal that costs far less to own.
- Early termination fee: check the term and the exit cost before you compare rates.
Tiered, interchange-plus or flat rate?
Tiered pricing sorts transactions into qualified, mid-qualified and non-qualified buckets at different rates. Interchange-plus passes through the real interchange and adds a stated markup. Flat rate charges one percentage for everything.
Interchange-plus is the easiest to audit because the markup is printed. Tiered is the hardest, because the processor decides which bucket a transaction lands in. Flat rate is simple but usually costs more for a business with a lot of debit or low-cost cards.
What does a cash discount statement look like?
The fees are still itemized, and a program line offsets them. What you check is that the offset covers the fees each month, so the net cost to the business stays where the quote said it would.
On a Genius account with the cash discount program, we review the first statement with you and adjust anything that does not match the quote.
What does a free rate review cover?
We take one recent statement, compute the effective rate, mark every fixed and avoidable line, and show the same volume on the cash discount program and on a standard account next to it. It takes about ten minutes and there is no charge.
About The Author
George Mayo owns NJ POS Systems and co-founded Swiped. He has worked in merchant services since 1994, when he and Mario Parisi founded Merchant Services Inc, which they sold in 2014. He still reviews statements and quotes himself. More about the company.
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