Merchant Statement Analyzer

Merchant Statement Fees Glossary

Plain definitions of merchant statement fees: statement, PCI non-compliance, monthly minimum, batch, chargeback, annual and early termination fees.

Processors use different names for the same charge. This glossary groups the common line items by type, says who receives the money, and notes what to check. Definitions come from processor and bank help pages where they exist, and from industry references where they do not.

Transaction fees (charged per sale)

Discount rate. The percentage of each sale your processor keeps, as agreed in your contract. Chase defines it as the percentage agreed with the bank for processing transactions. On a flat-rate plan it includes interchange; on interchange-plus it is the markup only.

Per-item fee, transaction fee, authorization fee. A fixed amount in cents on each transaction, charged with the percentage. Fiserv defines transaction fees as service costs charged to a merchant on a per-transaction basis. Some processors label the fixed part an authorization fee.

Interchange. The fee set by the card network and paid to the card-issuing bank. See Interchange, Assessments and Markup: 3 Layers of Card Fees.

Assessment, network fee. The card network's own charge. Chase lists assessment fees as set by the card networks.

Batch fee. Charged each time you close a batch. Fiserv defines a batch as a group of credit card transactions, typically sent at the end of the business day. One batch a day means roughly 30 fees a month.

AVS fee. A small per-use fee for Address Verification Service on keyed or online transactions.

Gateway fee. A monthly or per-transaction fee for the online gateway that connects a website or software to the processor. Chase calls these access fees for online payment gateways or tools.

International or cross-border fee. An extra percentage on cards issued outside the United States. Square and Stripe both publish a 1.5% add-on for international cards on their standard pricing.

Monthly and periodic fees

Monthly fee, account fee, service fee. A flat charge for keeping the account open. Chase describes monthly fees as account maintenance or statement delivery.

Statement fee. Fiserv describes it as a charge imposed when merchants choose paper delivery, with a separate fee for each location. Many processors waive it for electronic statements.

Monthly minimum. If your processing fees for the month fall below a set amount, you are charged the difference. If you process nothing, you pay the full minimum. Check whether the minimum is measured against all fees or only the discount rate.

PCI compliance fee. An annual or monthly charge for the processor's PCI program (scans, questionnaires, support). Wells Fargo's published Clover pricing, for example, lists a $10.00 per month PCI Compliance Program fee per merchant ID.

PCI non-compliance fee. Fiserv defines these as industry-standard charges billed to merchants who are not PCI compliant. It is charged every month until you validate compliance, usually by completing a self-assessment questionnaire. The PCI Security Standards Council itself does not monitor compliance or set these fees; your processor or the card brands do.

Annual fee. A once-a-year charge, often billed in a specific month. Look for it on that month's statement only.

Equipment lease. Fiserv defines the leasing fee as the subscription charge for leasing your point-of-sale system. It is separate from processing and often runs on its own contract.

Software subscription. Point-of-sale or dashboard software billed monthly. Square's paid plans, for example, carry a lower in-person processing rate than its free plan.

Chargeback. Chase describes a chargeback as a customer disputing a transaction and the payment being temporarily taken back from your account. Visa's dispute guidelines explain that the issuer returns the transaction to the acquirer, and if the dispute is valid the acquirer deducts the amount from the merchant account.

Chargeback fee. A fixed fee for handling each dispute, charged whether or not you win. Fiserv notes it is incurred when a customer disputes a transaction, product or service. Stripe publishes a $15.00 dispute fee on standard pricing; Square states it charges no fee for chargebacks and dispute management.

Reversal, adjustment. Chase defines an adjustment as a manual correction or account reconciliation entry; reversals are bank corrections of a transaction.

Contract and account fees

Early termination fee (ETF). A fee for closing the account before the contract term ends. Wells Fargo's Clover pricing page states it charges none; many contracts do. Check your agreement for the term length and the fee amount before cancelling.

Setup or application fee. A one-time fee to open the account.

Account inactivity fee. Charged when no transactions are processed for a period. Square states it charges none.

Downgrade surcharge. On tiered plans, the extra percentage when a transaction falls into a mid-qualified or non-qualified tier. See Credit Card Processing Pricing Models Explained.

1099-K backup withholding. Not a fee, but a deduction that can appear on a statement if the processor lacks a valid taxpayer ID for your account. Bank of America lists it as a statement section.

Checklist: what to question on each fee

  1. Is it in the contract or fee schedule you signed?
  2. Is it for a service you use (paper statements, a gateway, a lease)?
  3. Can it be removed by an action on your side (PCI questionnaire, e-statements, fewer batches)?
  4. Did it change since last month without notice?

FAQ

What is the difference between a PCI fee and a PCI non-compliance fee?

The PCI fee pays for the compliance program. The non-compliance fee is a penalty charged until you complete validation. You can be billed both in the same month.

Can I avoid batch fees?

Closing one batch a day instead of several reduces the count. Some plans do not charge them at all.

Is a monthly minimum the same as a monthly fee?

No. A monthly fee is always charged. A monthly minimum only applies when your other fees fall short of the minimum.

Are chargeback fees refunded if I win?

Depends on the processor. Some return the fee when the dispute is resolved in your favor; many do not.

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