Understanding a Merchant Statement

Thu 4th Apr 2019
Understanding a Merchant Statement

1. Preparation; A famous man once said, “By failing to prepare you are preparing to fail”. You will need a piece of A4 paper and a pen then find a quiet space, pop on some soothing music (we find this helps to calm the nerves) and then open the statement.


2. You are now faced with an overview of “Charges” on the first page. These come in many forms, in fact too many to note but in general they will cover the following:

Interchange: Interchange is a term used in the payment card industry to describe a fee paid between banks for the acceptance of card-based transactions.
Scheme Fees: Scheme Fees represent a charge the banks are required to pay to Visa and MasterCard in order to be a member and process the card types.
Additional Charges: Card machine rental, PCI, Paper statements (save the trees please).
Premium Charges: A ‘Premium Charge’ is exclusively a term used by WorldPay to define non- standard consumer card processed transactions.


3. A degree in acronyms will come in handy for this next part: Understanding the card types. Get the A4 paper and draw a large square, place a cross in the middle and keep to one side: VDBT (UK Visa Debit), VIEL(Visa Electron), MCPD (MasterCard Premium Debit), MDUK (MasterCard UK Maestro) and many more... These are just a few, but once you understand the types of cards your customers use then you can understand the charges.


4. Take a break now...!! Make a cup of Camomile tea... If working from home, try to keep away from the alcohol...!! Take a couple deep breaths and let’s move on, alternatively skip to number 7.


5. More jargon:

CNP: Customer not present... “Wait. What...?? but Donald and Deirdre were standing right there when I swiped their card” I hear you say...??? I will explain these charges later*.

Non-Secure Transaction: A term Barclaycard typically use for CNP type transactions.

Non-Qualified Fee: A term applied where a CNP transaction has been completed through a customer present account typically found with First Data & Cardnet.

Exception Fee: A term used to describe non-standard consumer card processed transactions.

DIAL AUTH: The term Elavon use for Authorisation Fees.

UK Base 24: The term GlobalPay use for Authorisation Fees.

MOTO Fee: Mail Order & Telephone Orders – A term used where card details are taken either by telephone or mail order.

PCI DSS: PCIDSS stands for Payment Card Industry Data Security Standards, it is a mandatory form of compliance set in place by Visa and Mastercard

• If your brain is starting to hurt get your A4 sheet of paper, lay it on the floor and proceed to
carry out a headstand... This wont help but my yoga friend swears by it...

*Customer not present: If a card payment is taken and you swipe the customer card, the card machine will class this as CNP. Also, if you manually enter the card number the card machine registers this as CNP


6. Understanding the rates: These can be tricky.. Decimal points have truly gone out the window here because if you see 0.002220% This is NOT less than 0.01%... How much is this? It’s actually 0.22% which is much easier to understand than 0.01225%, looks good Eh...?? That’s 1.225%


7. Send us the statement so we can make sense of all the gobbledegook for you... This will save years of wrinkles and grey hair.

*Merchant statements are all set out differently and this covers most providers but not all.