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Merchant Statement Analysis: The Ultimate Savings Hack

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May Montenegro | November 13, 2023

“Tired of surprise fees and feeling overcharged? Find out more about merchant statement analysis to make sure you're getting the best deal for your business. ”
6 min read
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    Is your business running a lot of credit card transactions? Perhaps you've recently encountered fee hikes on your credit card processing statement, felt overcharged by your merchant processor, or even questioned the cost-effectiveness of your current pricing structure.

    Fret not. Enter merchant statement comparisons.

    Analyzing and comparing merchant statements is a powerful tool for business owners seeking potential savings on credit card processing fees and an enhanced financial bottom line. In this article, we'll explore the concept of merchant account statement comparisons, when and how to conduct them, and the cost-cutting benefits they can bring to your business.

    TL;DR

    Merchant statement comparisons allow you to compare your merchant processing statement from different payment service providers to identify potential cost savings.

    • It helps businesses understand the wholesale or base cost of credit card processing fees and hidden charges behind their merchant statements.
    • Statement analysis helps small business owners make a choice of the best payment provider that matches their business's volume and requirements, whether through fixed rate pricing, interchange plus, or a tiered pricing model.
    • Spot trends in transactions and interchange fees, allowing owners to save money and improve their bottom line.
    • Conduct statement comparisons when signing up with a new payment service provider, periodically, or when your business experiences growth or changes.

    What is a merchant statement comparison?

    A merchant reviewing their statement

    Not all merchant statements are equal.

    A merchant statement comparison, also known as a merchant statement analysis, is the process of reviewing and comparing statements from different payment service providers (PSPs) or credit card processors. Merchant account statements provide a detailed breakdown of the credit card processing fees and other costs associated with payment processing.

    If you have not read about our blog about merchant statements, give it a read here. By scrutinizing these monthly statements and comparing them with different providers, business owners can gain insights into their costs and identify opportunities to save money.

    Why compare merchant statements?

    Because not all merchant processor have the same pricing model, it's best to have an overview of what each providers may charge. By comparing merchant statements, this also gives small business owners a competitive advantage in managing card processing fees through reactive and predictive strategies.

    Reactive cost strategy

    The true beauty of statement comparisons is that they help you understand the true cost and potential savings on your transactions across pricing structures from different providers. You'll be able to spot all the fees, including hidden fees, markup fees, even batch fees, that make up your total costs.

    You can accurately assess your expenses and devise a cost-saving strategy by choosing the payment provider that matches your business's volume and requirements, whether it's through flat-rate pricing, interchange plus, or a tiered pricing model.

    Predictive maintenance cost savings

    You can also spot trends in your business with these comparisons. For instance, you may see that certain credit card transactions or card types result in higher credit card processing fees. This allows you to plan ahead and come up with strategies to offset those costs, like raising prices or passing fees on to customers through surcharges or convenience fees.

    Compare your merchant savings

    How to do it

    Statement comparison is actually quite simple to do. Many merchant services provider offer this when you're shopping around for options. The basic information is within your monthly statements and you can easily hand them your document and a representative will crunch the numbers for you. But there are websites like Helcim's Rate Comparison tool where you can do it yourself.

    While the terms might change depending on the provider you're dealing with, these are the basics that you'll constantly need to think about when filling out statement analysis forms.

    • Current Monthly Spending: This is the total monthly fees you pay your current provider. It includes all the statement fees from your all your transactions including credit and debit transactions and their respective fees and miscellaneous fees like batch fee, PCI fee, and batch settlement fee.

    • Transaction types: This refers to the split between your in-person transactions (like card swipes) and the ones where you type in card info for online payments. This affects the rates you will get charged on.

    • Types of cards you accept: This refers to the mix of cards you take, whether it's Visa, MasterCard, Amex or others. It’s important to see the share (in %) among these card companies as some cards have higher interchange rates or card brand fees than others. As an example, merchants who process card transaction on Amex or commercial cards mostly will have a higher effective rate than businesses who process consumer visa cards.

    • Monthly card type totals: This is your transaction total for each card payments you have accepted.

    • Transaction count by card type: This refers to the number of transactions for each specific card type.

    Compare your merchant statement preview

    Still on the fence on how to do it? Watch how we compared a real Clover merchant statement with Helcim here.

    When to conduct merchant statement analysis

    Credit card processing costs can change anytime, so it’s important to regularly check and do statement analysis. Ideally, these are the best times when running a statement comparison with a merchant provider or on your own.

    • When signing up with a new payment service provider: If you're considering switching or signing up with a new payment provider, it's an excellent time to compare their proposed merchant processing fees and terms with your current provider.

    • Annually or periodically: Even if you're satisfied with your current provider, it's a good practice to perform a statement comparison on an annual or periodic basis to ensure you're still getting a competitive deal.

    • When your business grows or changes: If your business experiences growth or undergoes significant changes, your payment processing needs may evolve. This is an opportune moment to revisit your payment processing terms and explore cost-saving options.

    Takeaways

    Understanding and comparing merchant statements is crucial for managing your business's finances and getting the best savings on fees and there are multiple ways on how to go about it. Both DIY statement analysis or provider-led statement comparisons will both help in identifying any discrepancies or errors and can stop your business from overpaying processing fees.

    Take the time to understand your statements and use it as a tool to improve your business's financial health and profitability.

    FAQs

    What is a merchant statement analysis or statement comparison?

    Merchant account statement comparisons allow you to run your own statements with different providers’ pricing structure to see the costs of payment processing fees.

    What are the benefits of running a statement comparison?

    Running a statement comparison can help you identify potential cost savings and gain insights into your credit card processing fees. By comparing different providers' pricing structures, you can make informed decisions to reduce processing fees.

    Are statement comparisons tool free?

    Merchant providers may offer it for free as part of their sales process when you phone in and inquire about their services. Helcim's online statement comparison tool is free of charge.

    What happens after I upload my statement?

    With Helcim, after uploading your statement, it will be analyzed by our Sales team and will get back to you in 1-2 business days with a complete comparison with Helcim. You may also use this time to ask our team questions about our rates, tools, and steps to switch to Helcim.

    What happens after I run my statement's numbers?

    With Helcim, after keying in your statement's numbers, you’ll be emailed a PDF file of the Helcim equivalent of your statement and see the processing costs and potential savings with our rates. This information can help you make more informed decisions about your current payment processing services and be able to seamlessly switch to Helcim.

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