Merchant Statements: Cut Fees and Maximize Your Savings

If you’re a growing business, credit cards are likely a substantial source of revenue. But like many merchants, you could be leaving money on the table without even realizing it by not closely reviewing your merchant statements.

Could this be happening to you?

According to the Nilson Report, merchants paid a staggering $126 billion in credit card fees in 2022, a 20% increase from the previous year and more than double what they paid in 2013.

Consider the plight of Carmen, a fictitious product distributor on the Eastern seaboard of the U.S. Over the last several years. Carmen has seen ACH and check business decrease and card purchases skyrocket.

“Customers want to use credit cards for rewards and additional float for cash flow instead of traditional ACH or check payments. But the credit card fees are really affecting our bottom line, especially when they wait till the invoice is due and then call to pay by credit card – and often in cases where the invoice is already several days past due. Those individual transactions are killing us, between the transaction fees AND percentages for each purchase!”

What Carmen doesn’t realize is that there ARE ways she can control the company’s rising card-based fees–she just needs to know what to look for.

In this blog, I’ll walk you through how to find the hidden ninja fees and overcharges that so many businesses overlook and show you what you can do to stop them from sneaking off with your hard-earned cash.

What Are Merchant Statements and Why Do They Matter?

Merchant statements break down the fees, charges, and transactions that occur during your credit card processing.

Sounds simple enough, right?

But just like spotting hidden charges on a phone bill, it’s easy to overlook fees buried in these complex statements—an oversight that can lead to serious losses over time.

Each merchant statement includes several components, like interchange fees, processing rates (often called “discount rates”), and dues and assessments from card networks.

If you’re not monitoring these details closely, you’re likely missing out on opportunities to reduce costs and streamline payment processes.

Integrating with Microsoft Dynamics 365 or Business Central provides powerful tools to streamline payment processing.

These platforms help you select the right payment processor, spot hidden fees, and identify negotiation opportunities—ensuring your merchant service provider is working FOR you, not against you.

Fees to Watch for on Your Merchant Statement

Merchant statements are filled with hidden fees that can quietly chip away at your profits if you’re not paying attention. Here are the key ones to watch out for:

• Interchange Fees: These go to the card-issuing bank (like Capital One or Chase) and vary depending on the type of card used—think rewards or corporate cards. The rates are set by Visa or Mastercard but collected by the bank. Although Visa and Mastercard strictly define interchange fees, as a merchant, you may qualify for a lower interchange rate category in certain cases.
• Visa/Mastercard/Discover Dues & Assessments: These fees, typically around 0.17%, go directly to the card networks. They are non-negotiable and appear under various descriptors such as Network fees, FANF fees, or Dues and Assessments.
• Processor Fees (Discount Fees): These are the fees you pay your merchant services provider for processing transactions. They can vary based on your agreement, and you should scrutinize them closely. Sometimes these appear as a single line item on your monthly statements, while additional fees—like security fees, batch processing fees, or other specialized charges—may also be listed as a special line item.

Top 4 Ways for Merchants to Save Money

As you can see, these fees are like invisible pickpockets—quietly sneaking away with your profits before you even notice.

But with a few simple steps, you can catch them in the act and keep your earnings where they belong:

1. Switch to Interchange Plus Pricing

This transparent model gives you more control and savings over bundled pricing. For example, debit cards often have lower fees than other cards. Once you understand how fees are broken down by interchange category, you can decide what changes to make based on your business’s specific needs.

2. Implement a Credit Card Surcharge Fee

A strategy that works well for businesses that handle a high volume of credit card transactions, surcharge fees allow you to make your customers responsible for some or all of the credit card processing costs—legally and within regulatory compliance. Partnering with USTPay to set up these fees ensures the process is implemented correctly and in compliance.

3. Explore Credit Card Alternatives

By accepting payments via ACH, eCheck, or digital wallets, you can realize significant savings on processing costs compared to traditional credit cards. Another option is to implement cash discount programs, which offer incentives to customers who pay in cash. USTPay can help you explore and implement these options effectively.

4. Qualify for Level-3 Processing or Charity Rate Interchange

For the most significant savings, see if your business qualifies for Level-3 processing or, for nonprofits, a charity rate interchange.

Level-3 processing provides enhanced transaction data, such as sales tax amounts and purchase order details, and in some cases, full itemization of purchases contained on an invoice.

Providing these details in the correct format will lower interchange rates on purchasing and corporate/fleet cards by as much as 1%.

This solution is ideal for B2B merchants, offering benefits like:

• Lower Interchange Rates: More detailed data leads to reduced fees.
• Better Data Tracking: Cardholders can monitor spending more accurately.
• Improved Reporting: Enhanced data provides greater financial insights.
• Increased Savings: Especially valuable for recurring or high-value B2B purchases.

Adopting any or all of these four strategies can empower you to take control of your payment processes and stop the quiet draining of fees from your profits.

USTPay can help determine your eligibility and set up the features outlined above.

We support businesses through a payment orchestration platform with omnichannel payment capabilities and expanded gateway options.

What’s more, USTPay’s integration with Microsoft Dynamics 365 Business Central ensures seamless payment management and optimized operations.

Practical Tips to Maximize Savings from Your Merchant Statements

Maximizing savings from your merchant statements takes diligence, but a proactive and intentional approach will go a long way. Here are a few practical tips to keep your costs under control:

1. Review Statements Monthly: Make it a habit to review your statements each month to flag any unusual fees or changes.

2. Compare Your Fees to Industry Standards: To ensure you’re not overpaying, benchmark your rates and fees against industry standards.

3. Ask Questions and Clarify Fees: If you’re unsure about something, contact your payment processor and ask for a detailed breakdown of any unclear fees. Understanding what you’re being charged will give you leverage.

4. Negotiate Better Rates: If you have a high volume of transactions, negotiate with your processor for lower rates. If your current provider can’t offer competitive terms, consider switching to another processor.

Over time, these small steps can add up to significant merchant savings and ensure your payment processes are as cost-efficient as possible.

The Role of Microsoft Dynamics 365 Business Central

Back to our friend Carmen, whose business was hampered from excessive credit card processing fees:

Since integrating her merchant processing with Dynamics 365 and finding a better merchant service provider, she has plugged the holes in her proverbial leaky boat, identifying hidden fees and negotiating better rates.

Suddenly, the company’s profitability looks more like a raging river and less like a stagnant puddle.

Dynamics 365 Business Central make it easy for businesses like Carmen’s to streamline and automate their credit card processing.

With a solution like USTPay that is an open, modern credit card processing platform embedded within Dynamics 365, it is possible to seamlessly switch merchant service providers to find the best rates and customer service level.

With built-in tools to automate payment collection, ensure accurate invoice and receivable posting, these platforms help companies stay on top of payment data, minimize errors, and uncover hidden savings—saving time and money.

Don’t Let Savings Slip Through Your Fingers

I can’t emphasize enough how reviewing your merchant statements regularly is critical to avoid the hidden fees and unnecessary charges that quietly drain your profits if left unchecked.

This is where USTPay can help. From identifying opportunities for Level-3 processing to setting up surcharge fees and alternative payment options, we provide the tools and expertise you need to streamline your payment systems.

With our support and Microsoft Dynamics 365 integration, your business can take control of your payment processes and increase your hard-earned profits.

If you’re ready to learn more about how USTPay can help you optimize your payment systems and maximize savings, reach out - we’d love to help.