How to Read a Merchant Statement: Card Fees Explained

Your card machine statement tells you exactly what you paid to take cards last month, but only if you know where to look. The three numbers that matter are your total card takings, the number of card payments, and the total fees. Divide the fees by the takings and you have your real cost of taking cards, which is the one number worth comparing between providers.

Here's how to find those numbers, what the fees on the page actually mean, and the mistakes to avoid.

Merchant statement or bank statement?

Make sure you're looking at the right document. Your merchant statement comes from your card provider and lists your card sales and the charges on them. Your bank statement only shows money arriving from the provider and any fees it takes by direct debit.

A bank statement usually can't tell you your total card takings or how many payments you took, because the provider pays your takings in as lump sums. If you want to understand your card costs, you need the merchant statement. Your provider sends it to you, for example by post each month ^[1]; ask them if you can't find it.

What's on a typical statement

Every provider lays out its statement a little differently ^[2], but most include the same building blocks.

• Transaction summary. Your card sales for the period, usually broken down by card type ^[2].
• Settlement summary. The amount processed and paid out to you each day ^[2].
• Transaction charges. The fees on each sale and refund, which depend on what the transaction was and how it was processed ^[1].
• Monthly charges. Regular fees such as a POS service fee or minimum billing fee ^[1].

The fees, decoded

The merchant service charge

Part of the processing cost is interchange, paid to the card issuer. For eligible domestic consumer-card transactions where the merchant, acquirer and card issuer are all in the UK, interchange is capped at 0.2% for debit and 0.3% for credit ^[3]. Those caps do not limit the provider's total merchant service charge ^[3].

Card-type rates

You'll pay different rates for different card types ^[1]. If you're not on a single flat rate, your transactions will often be listed by card type using short codes, such as "VS Debit" for Visa debit ^[2]. Look at which lines carry the higher rates, since those are where your costs are going.

Per-payment fees

Some providers charge a transaction fee every time you process a sale or a refund ^[1]. These are commonly between 1p and 3p per payment ^[4]. Multiply by your number of payments to see what they really cost you.

International card fees

When a customer pays with a card issued outside the UK, some providers add an international transaction fee on top of the merchant service charge ^[1].

Minimum monthly charges

If your card fees for the month fall below an agreed minimum, you can be charged the difference ^[1]. These minimums typically run from £20 to £40 ^[4]. They matter most in quiet months.

PCI fees

PCI DSS is the card-security standard. Many providers charge a compliance fee for it, and a separate non-compliance fee if you don't meet the standard ^[2]. Compliance fees can run up to £250 a year ^[4]. If you see a non-compliance fee, ask your provider what you need to complete to stop it.

Chargebacks and refunds

When a customer disputes a payment, a chargeback fee may apply, up to £30 each ^[4]. Refunds can also carry their own transaction fee ^[1].

Work out your effective rate

Your effective rate is your total fees divided by your total card takings. It folds every percentage, per-payment fee and monthly charge into one figure you can compare like for like.

Example: a business takes £12,000 on card in a month across 1,000 payments, and its statement shows £144 of fees in total. Its effective rate is 1.2% (£144 divided by £12,000), and it's paying about 14.4p per payment on average.

Two things to remember. First, a single quiet month can make your rate look worse than it really is, because fixed monthly charges are spread over fewer sales; looking at two or three months gives a fairer picture. Second, compare the effective rate, not the headline rate in an advert, because the headline usually leaves out per-payment and monthly fees.

A worked statement breakdown

Example: these are invented monthly figures, not a customer statement. A merchant takes £8,000 through 400 card payments. Its processing fees are £80, authorisation fees £8, machine rental £20 and other charges £12. Enter those amounts into the matching calculator fields before VAT.

Example: the £120 total is £80 + £8 + £20 + £12, an effective rate of 1.5% of £8,000. Do not enter the £120 total as processing fees and add its components again. If your provider combines two categories, separate them using the detail lines or ask the provider before comparing.

Use the card machine fee calculator to enter your own amounts. Check gross sales against settlement credits: refunds, fees or timing can mean the amount reaching your bank is different.

If your statement splits debit and credit charges, our guide to debit vs credit card fees explains why they differ.

A quick statement check

1. Find your total card takings, payment count and total fees for the month.
2. Work out your effective rate and your average fee per payment.
3. Check the rates match your agreement. If they don't, ask your provider why.
4. Look for fees you didn't expect, such as PCI non-compliance, minimum charges or international card fees.
5. Compare like for like: the same months, the same takings, and the full monthly cost.

If the comparison suggests a change, read how to switch card machine provider before giving notice. It covers contracts, exit costs and planning the changeover.

Let our savings checker read it for you

If you'd rather not do the maths, the TrustPOS savings checker can read your statement for you. Upload a PDF or a clear photo (JPG or PNG, up to 6 MB), and it reads the figures in your browser. It suggests your monthly card turnover, number of payments, processing fees, authorisation fees, machine rental and other charges, and you check and correct anything before it compares your costs.

The comparison is an illustration, not a final quote: your card mix and final terms can change the result. Your statement file is only sent to us if you choose to include it with an enquiry.

Quick answers

What is a merchant statement?

A merchant statement is the monthly statement from your card provider. It lists your card sales and the charges on them, which your bank statement usually can't show ^[1].

How do I work out what I pay to take cards?

Add up every fee on the statement, divide by your total card takings, and multiply by 100. That effective rate is the one figure worth comparing between providers.

Why is my card machine bill higher than the advertised rate?

The headline rate is only one charge. Statements can also include authorisation fees, machine rental, minimum monthly charges and other recurring fees ^[1][2]. Check every line, not just the percentage.