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Understanding Your Credit Card Processing Statement

Updated: Jan 7

Between all the fees, codes, and random miscellaneous numbers, figuring out your credit card statement as a new business owner can seem daunting… and you’re not alone! That’s why we have compiled a list of the basic fees or charges you may come across on your credit card statement so that you can understand exactly what you’re looking at.


Common Fees and Charges

Every business is different, and so are the types and levels of fees that it may incur. Many of these fees are distributed amongst the credit card issuer, the credit card brands, the acquiring bank, and the payment processor. It’s up to the processor’s discretion whether to mark up these fees depending on the risk level imposed by the type of merchant.


Merchant Discount Rate (MDR): this is a percentage rate fee attached to the payment processing for all debit and credit card transactions.


Non-Qualified Discount Percentage: merchants that accept card-not-present transactions will encounter non-qualified discount percentage fees.


Authorization Fees: also known as a transaction fees, these are collected by the payment gateway for all credit card transactions. An authorization fee will typically range from $0.05 - $0.40 per transaction.


Interchange Fees: these are charged by the banks as their way of covering the costs associated with accepting, processing, and authorizing card transactions. Interchange fees are considered wholesale and cannot be negotiated.


Card Brand Fees: another wholesale, non-negotiable fee is the card brand fee. These are set and collected by the credit card networks, like Visa, MasterCard, Discover, American Express, etc.


Chargeback Fees: one of the most expensive fees, especially if multiple occur, are chargeback fees- which range from $20 - $100 per occurrence. If there is a transaction deemed illegitimate or if the card holder (customer) wants the sale voided, the acquiring bank will charge the business owner for having processed the original sale.


Reserve Funding: depending on the level of financial risk your business is evaluated to have, reserve funding may be necessary. This is where funds are temporarily held to be used as an emergency fund to cover the merchant and the processor in case unexpected costs occur (like chargebacks). Basically, and contingent on your specific reserve terms, these funds are normally taken out by the processor during batch deposits, held over a temporary period, and then released back to the merchant.


Unfortunately, if you want your business to be able to accept debit and credit cards, fees are unavoidable- but you don’t have to overpay! With Align ecommerce you can significantly lower and even eliminate many of the fees associated with running a merchant account, such as account set up fees, annual fees, monthly fees, account service fees, and monthly minimum fees. We, at Align, work hard to offer you the most competitive pricing- and in most cases, we even pass on the wholesale fees without a markup! If you have any fees that you’re uncertain about, or if you think you might even be paying too much, we will gladly schedule a free consultation to guide you through all the ways we can help. Here are some additional blog articles that might be helpful for understanding your credit card processing statement and optimizing your payment processing:


  1. Payment Processing for Small Businesses

  2. Why a Good POS System Matters to Your Business

  3. What is a Payment Gateway?

  4. Save on Credit Card Processing with Align ecommerce

  5. Merchant Accounts Explained

  6. Tips to Grow Your eCommerce Business

  7. Choosing the Right Partner For Your Credit Card Processing

  8. What is Credit Card Processing

  9. Merchant Account Reserves Explained


Feel free to explore these articles to gain more insights into understanding your credit card processing statement and optimizing your payment processing strategies!






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