October 15, 2024

Merchant Statements: What You Need to Know

Michelle Richter, Director of Merchant Support

• 
• 
• 
• 
• 

Payments 101

Subscribe

Many business owners don’t feel they have the time to sit down, learn to interpret the info, and analyze transactions in their monthly statements. But keeping a regular tab on your payment processing is non-negotiable for business success. 

We’re here to help you figure out exactly what your statement is trying to tell you so you can get the crucial info you need quickly and without frustration, including:

• What is a merchant statement?
• Why you need to read your account statements
• How to read your statement (with examples)
• 7 statement tips

What is a Merchant Statement?

At the highest level, merchant statements list all of a merchant’s transactions, sales, and processing fees for the last month. You may also see these referred to as merchant account statements, credit card processing statements, or merchant processing statements. 

Why You Need to Read Your Account Statements

Keeping a close eye on your statements is non-negotiable for business success. Regular statement review can help you:

• Make better-informed business decisions
• Catch and combat chargebacks before it’s too late
• Better understand your relationship with your processor/acquirer
• Spot fraud cases quickly

How to Read Your Merchant Statement

Let’s take a look at a sample Electronic Payments statement. We’ll walk through each section and explain what you need to know about the info there. If you’re working with a processor other than EPI, your statements will look a bit different than this, but the same basic components will be similar. If you’re already in the EPI family, these examples should be a great walkthrough for your monthly reviews.

(The samples we’ll look at are examples for training purposes, so you may notice that they are a bit sparser than your regular monthly statements!)

Getting Started

1. The top of your statement includes personal information such as your name and address. It’s a good idea to verify this info is correct, just in case.
2. Your statement period is the dates on which the transactions in this statement took place. 
3. Your merchant number will come in handy if you need to call customer service (also known as merchant support). You can find both your merchant number and the customer service telephone number here and at the top of every page in your EPI statement.
4. Your Summary offers a high-level overview of the information in the rest of the statement. Note the color coding for each section within the summary box—this color coding will carry through the rest of the statement to help you navigate:

1. • Green for Amounts Submitted
   • Orange for Third Party Transactions
   • Pink for Adjustments/Chargebacks
   • Blue for Fees Charged

Important Info and Notices

Each of your statements includes important notices like the examples above. You’ll typically find these beginning under the Summary, but you should read on to see if there are any continued notices on subsequent pages (as is the case with these samples).

While they may initially look like boilerplate, don’t be tempted to skip these sections; it’s extremely important to review them every month, as they can include time sensitive information like:

• Updates from card networks
• PCI compliance info
• Validation dates for PCI compliance

Card networks won’t contact you directly to notify you of changes, so it’s critical to keep an eye on your statement notices to ensure you don’t miss anything. The validation dates for PCI compliance are also important—missing these can result in fees. You can see an example of this at the end of the last paragraph in the samples above.

Detailed Summaries

These sections provide more detailed information about your high-level transactions. In the second table above, the values in your Funded Amount column match what you see on your bank statement. Within the bank statement, you’ll find these denoted as Bankcard, BNKD, or BankCD to categorize the transaction within the merchant processing industry. The numbers following this refer to your processor (1205 or 5642 are EPI), and the code at the end of the entry in your bank statement gives you more information about the transaction activity:

• DEP codes relate to sales, refunds, or batches run through a terminal, gateway, or POS.
• ADJ codes refer to anything not processed through the channels above. These include chargebacks, direct network charges, and diverted and released funds.
• DISC refers to fees

How your Fees Charged column looks in the table above can differ depending on the setup of your account. The example above shows monthly discounting. If your account uses the same structure, you’ll see zeros throughout the column until the end of the month, when all fees come out at once.

If your account has daily discounting, you’ll see values for each day, as in the example below:

Some important notes on daily discounting:

• Zero values do not necessarily mean you incurred no fees.
• Your statement considers Saturday and Sunday a single day, so you will only see one line item for these together.

Amounts Submitted

Amounts Submitted (also known as batches) are your “standard” transactions. This section tracks anything that fell in the normal batching process over the last month.

Third Party Transactions

This section will be blank like the sample above unless you have a direct relationship with a specific card company, like American Express. Since these transactions are processed differently, you’ll see information about them isolated here.

Adjustments & Chargebacks

This section contains chargebacks, adjustments, split funds, and cash advance. It’s important to note that not everything in this section is a chargeback; it is just anything outside the normal batching transaction process.

If you do have a chargeback or network adjustment, you’ll see ADJUSTMENT in the Description column. If you see MFA AMOUNT instead, you’ll know this is split fund or cash advance activity.

Fees Charged

In the example above, INTERCHANGE and DUES & ASSESSMENTS are fees associated with card associations (more on this below). EPI and other processors cannot control or change these fees. 

The only EPI charges you’ll see in this section are Basis Points (BPS) and authorization charges. Above, DISC 1 (line 2) denotes monthly BPS. You may also see DISC 6 on your statement—these are daily BPS. The first line item under AUTHS & AVS is an authorization charge. The example above says CPU GTWY, meaning the fee is associated with an authorization requested via CPU-CPU line or gateway. There are many other codes you might see here, depending on how the merchant requested authorization.

Interchange Charges

Interchange charges, or program fees, are rates set by card associations (Visa, Amex, etc.) and are essentially the cost of using their credit network. If your account uses Interchange, you’ll see that each card costs a different amount to process. Card associations use these charges to fund cardholder incentives like rewards points. The entry method can also impact your fees; swiped, dipped, and waved entries cost less than manually key-entered transactions.

If you have Interchange (IC) pricing, your statement will include a table with rates for each card network like the one above. If you don’t see a table like this in your statement, you are likely set up with a flat rate. Don’t worry too much about which setup you have; it has little impact on your business beyond how you interpret your statement.

Tax Information

The end of every statement includes an IRS-required section for tax purposes. This lists gross reportable sales by month and year-to-date (YTD) associated with your tax ID number (TIN). The YTD amount on the December statement should match what you see on your 1099, but it’s important to note that these are gross sales only. To get information about refunds, chargebacks, and adjustments, you should work with an accountant who can dive deeper into the specifics of your account.

7 Merchant Statement Tips

Here are some of our top tips based on your most common statement questions:

1. The best way to find your way through an EPI statement is with the color coding system, so stick to the colors if you can!
2. Remember: not everything in the Chargeback & Adjustment column is a chargeback. Check the descriptors before worrying—you may just have split fund or cash advance activity.
3. If you see “electronic payments” in your statement, check the capitalization. If it’s lowercase, it refers to general transactions made electronically (not EPI).
4. Review your statement every month! If you catch chargebacks early, you have the opportunity to address them.
5. Always read the Important Information About Your Account. There are critical dates and details in this section you shouldn’t miss.
6. Review your bank statement alongside your merchant statement to get more context into your accounts—just be aware that your bank statement may not show subtracted fees until the following month.
7. Call for support when you need it! Our customer service/merchant support number is on every page of your statement. We’re happy to help interpret and walk you through any areas that are giving you trouble. 

And, finally, if you’re seeing a rise in chargebacks on your statements, there are actions you can take! Learn more about combatting chargebacks.

800-966-5520 | www.electronicpayments.com