There are thousands of merchant service companies across the US consisting of direct processors, the banks that alliance with them, and the independent sales organizations that broker merchant accounts. More often than not, a merchant service statement is designed to confuse the business owner.
Drilling down to specific data on the merchant service statement, such as Sales Volume, Number of Transactions, and Total Fees will reveal your "True Effective Rate", not just the rate you were quoted. Here are some samples of merchant service statements from major credit card processors.
In laymen's terms, Interchange is the cost (in the form of a rate) passed through to the processor by the credit card companies. Such as; Visa, Mastercard, Discover, and American Express. With the thousands of credit cards circulating worldwide, there are categories that classify the rate to be passed through to the merchant. Nothing is free in this world, so minimizing your cost above Interchange is key.
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NABU stands for Network Access and Brand Usage. The Fee applies to all Mastercard settled transactions settled in the United States. Consider it a royalty fee passed through to the merchant. The current fee is .0195 (1.95 cents) per transaction. However, higher fees have been seen through some merchant service companies.
APF stands for Acquirer Processing Fee. Similar to Mastercard's NABU Fee, Visa charges for all credit card authorizations that take place in the United States. VS APF-CR distinguishes a Visa Credit Card, where as VS APF-DB distinguishes a Visa Debit Card.
VS-APF-Credit Card rate is currently .0195 per authorization, costing merchants 1.95 cents.
VS-APF-Debit Card cost merchants 1.55 cents (.0155 rate). However, higher fees have been seen through some merchant service companies.
Address Verification System. This fee shows up on the merchant service statement anytime a transaction is processed that requires the seller to verify the cardholders address with the issuing bank (aka the credit card). Typically, AVS is utilized with MOTO transactions which are Internet and card-not-present transactions. Unfortunately, address verification is not always distinguish a valid transaction.
PCI stands for Payment Card Industry. Major issuing banks created a compliance standard designed to protect consumers personal information when credit card transactions are processed. PCI Compliance Fees (aka Breach Insurance) are charged by processors to insure against a breach. These fees can be seen in the form of monthly, quarterly, or annual dues.
Six standards determined via a survey will result in either a Pass or Fail. Most Gateways that are encrypted or secured by the processor assumes the PCI responsibility. Failure to comply may result in increased dues until the standards are met. A breach may result in costly damages and fines to the merchant, and even banning from future credit card processing.
The short end of it - The Durbin Amendment imposes a cap on the interchange fees passed through to the merchant by Visa and Mastercard. Card processors are supposed to pass the reduced fees to the merchants. However, some processors capitalize on the change.