Do you ever read your merchant statement and wonder what all of the different fees mean? Merchant statements can be difficult to navigate. With so much information packed into a single report, it’s easy to overlook important details — including unnecessary or hidden charges. While every provider structures their statements differently, most include the same core components. Once you understand what to look for, you can quickly see exactly what you’re being charged, spot discrepancies, and uncover opportunities to reduce costs. Keep reading to learn how to break down your merchant statement — and use it to save on fees and strengthen your bottom line. What is a merchant statement? When you open a business account , you’ll start receiving a merchant statement — an essential tool for managing your business finances. A merchant statement is a monthly report detailing every transaction your business processes, including customer payments and the associated processing fees. Understanding how to read this statement is key to knowing exactly how much your business is earning, what you’re spending on payment processing, and where your money is going. Because running a profitable business involves far more than simply adding up the total payments you’ve accepted each day. Elements of a merchant statement Every payment provider formats its merchant statements differently. While the terminology and layout may vary, the core components remain largely the same. At a minimum, most merchant statements include a summary, a settlement report, and a breakdown of fees and charges. Summary As the name suggests, the summary provides a high-level overview of your activity for the month — including total transactions processed, total sales, and total fees deducted. Depending on your provider, it may also include comparisons to previous months to help you track trends in revenue and costs. Settlement report The settlement report breaks this information down further, showing a day-by-day view of the transactions processed and funds settled into your account. This section helps you reconcile daily sales with the deposits you receive. Charges The charges section outlines exactly what you’ve paid in fees — and it’s often the most confusing part of a merchant statement. Fees are typically divided into two categories: Transaction charges Transaction charges are fees applied each time you process an electronic payment. These include fees for debit and credit card transactions, along with service fees that may vary by card type. Other charges Other charges cover everything outside of per-transaction fees. These may include: Authorisation fees Terminal rental fees Installation or maintenance fees Monthly account fees Understanding your rate of acceptance One of the most important — and most misunderstood — figures on your statement is your rate of acceptance . Many businesses assume this rate reflects their true cost of processing payments. However, once additional fees (such as terminal rental or monthly service fees) are factored in, the effective rate can be significantly higher. Understanding your true cost of acceptance is essential to knowing whether you’re getting a competitive deal. Step 1: Identify your costs Every time you process a card payment, you incur fees. Businesses typically manage these costs by building them into pricing or applying a surcharge (where permitted). On your merchant statement, you’ll generally see two types of fees: Wholesale fees (interchange fees) Wholesale fees — also known as interchange fees — are paid to the cardholder’s financial institution. These fees are set by the card networks and are non-negotiable. They vary depending on: Card type (e.g. debit vs premium rewards credit card) Transaction size Merchant category Premium rewards cards often carry higher interchange fees because they cost issuing banks more to operate. Markup fees Markup fees are charged by your payment processor. This is how processors generate revenue. Unlike wholesale fees, markup fees are typically negotiable and can vary significantly between providers. Even small differences — just a few basis points — can add up quickly across hundreds or thousands of transactions. Step 2: Determine your pricing model Because markup fees are negotiable, understanding your pricing model is key to knowing whether you’re getting a fair deal. Your pricing model determines how fees are calculated and displayed on your merchant statement. There are four common models: Interchange-plus Interchange-plus clearly separates wholesale (interchange) fees from the processor’s markup. It’s the most transparent pricing model, but also produces the longest and most detailed statements. Once you understand it, however, you’ll have full visibility into exactly what you’re paying. Membership With a membership model, you pay a fixed monthly subscription in exchange for lower per-transaction markups. This model can benefit businesses with higher average transaction values, as it reduces the percentage impact of large sales. Flat-rate A flat-rate model charges the same percentage fee for every transaction, regardless of card type. Wholesale and markup fees are bundled into one rate, making statements shorter and easier to understand. Flat-rate pricing offers simplicity and predictability, which is appealing for many small businesses. Tiered Tiered pricing groups transactions into categories (such as qualified, mid-qualified, and non-qualified), each with different fees. While this model can appear straightforward, it often results in higher overall costs. Transactions may be downgraded into more expensive tiers, making fees less predictable. If you see terms like qualified (qual), mid-qualified (mqual), or non-qualified (nqual) on your statement, you’re likely on a tiered plan. Bringing it together Once you understand your statement’s summary, settlement report, fee breakdown, and pricing model, you’ll be able to calculate your true cost of acceptance — and identify opportunities to reduce fees and improve margins. Need a second opinion? Even when you know where to look, merchant statements aren’t always easy to interpret. Fees can be layered, terminology can be vague, and hidden costs can slip through unnoticed. Zeller Sales can help you decode your statement, calculate your true cost of acceptance, and compare it against a transparent, tailored alternative. Get in touch to see how much your business could be saving.