We all know that reading a credit card processing statement is a daunting task. Dozens of line items are listed that probably don’t mean a word to any regular person who owns a business. Moreover, the number of business owners who actually review their statements on a regular basis is much lower than you would think.
Many processing providers know this and exploit this exact situation. Proposed rates are usually met and can be verified, but the fees that are typically considered to be “pass-through fees” have been known to be marked up – sometimes even by a single penny. These are called padded fees. It may not seem like much, but those pennies add up over time and cut into your bottom line.
There are different types of pricing schedules in which businesses will pay far more than they typically should. Some examples of names of these pricing schedules are Tiered, Billback and ERR. Each of them has their own drawbacks, but the main point is to understand that your profitability will not reach it’s potential if you are set up with one of them.
Nowadays merchant processors will say that they are “transparent” when it comes to fees, but then will mark up many processing fees that you are not aware of. This is a fairly common practice in an industry that has taken advantage of businesses that can’t understand exactly what they are paying for. It is perfectly legal to markup these fees since there are no restrictions in place by the card associations or their affiliates to prevent it.
What can you as a business owner do about this?
It would be best to ask your current processing provider or a trusted advisor to complete a statement review with you. This could potentially lead you to discovering some padded fees that you missed before. Also, doing some of your own research online could be a benefit for when you make contact with your current provider and have discussion points to bring up.
If you find that you still cannot understand your statement or are having recurring issues with your current provider, PolyPay can assist you.
We have a team of dedicated individuals whose focus is to provide transparency and honesty to our clients. We understand that your time is valuable. Let us know the problem points with your current processing - we are ready to provide a tailored solution to match your wants and needs.