NEXSYS Knowledge Base | Merchant Services / Payment Processing
Your monthly merchant statement is one of the most important documents your business receives — and one of the least understood. Most business owners glance at the total fees, shrug, and move on. But buried in that statement is everything you need to know about what you're actually paying and why.
This article breaks down the key sections of a merchant statement and explains interchange — the single largest component of your processing costs.
Statements vary by processor, but every legitimate merchant statement contains the same core sections:
The total you pay is the sum of interchange + assessments + processor markup + fixed fees. The first two are the same regardless of which processor you use. Shopping for a processor means comparing the last two.
Interchange is a fee paid by your acquiring bank (your processor) to the customer's issuing bank every time a card transaction is processed. In practice, that cost is passed directly to you as the merchant.
It exists because the issuing bank takes on risk by extending credit or guaranteeing funds to the cardholder. Interchange is their compensation for that risk.
Interchange rates are set by Visa and Mastercard, published publicly, and updated twice a year (April and October). There are hundreds of interchange categories — the rate that applies to any given transaction depends on several factors.
Not all transactions cost the same. The interchange rate on any given sale depends on:
| Card type | Rewards cards, corporate cards, and premium cards carry higher interchange than standard debit or basic credit cards. The more perks the cardholder earns, the more interchange you pay. |
| How the card was processed | Card-present transactions (chip, tap, swipe) are lower risk and qualify for lower rates. Card-not-present transactions (online, phone, manual entry) are higher risk and cost more. |
| Your business type (MCC) | Every business is assigned a Merchant Category Code (MCC). Certain industries — like utilities, government, and non-profits — qualify for reduced interchange rates. |
| Data quality & transaction timing | Transactions that include complete data (AVS, CVV, batch settled on time) qualify for better rates. Incomplete or late-settled transactions can "downgrade" to a more expensive interchange category. |
Processors present interchange costs to merchants in a few different ways. Understanding your pricing model helps you evaluate whether you're getting a fair deal.
| Model | How It Works | Best For |
| Interchange Plus | You pay actual interchange + a fixed processor markup. Transparent and typically the lowest cost. | Most businesses — especially higher volume merchants. |
| Flat Rate | One fixed rate on every transaction regardless of card type (e.g. 2.9% + $0.30). Simple but often more expensive. | Very low volume or early-stage businesses. |
| Tiered | Transactions are bucketed into "qualified," "mid-qualified," and "non-qualified" tiers at different rates. Least transparent — processor controls the buckets. | Generally not recommended — hard to audit. |
| Dual Pricing | Cash and card prices are displayed separately. Card-paying customers absorb the processing fee. Effectively eliminates processing costs for the merchant. | Retail, restaurants, and service businesses looking to offset or eliminate processing costs. |
⚠️ Tiered pricing is the most common model used by processors who want to obscure true costs. If your statement doesn't show actual interchange rates, ask your processor for an interchange-plus breakdown or contact NEXSYS for a free statement analysis.
You don't need to understand every line item. Focus on these four numbers:
| 1 | Total sales volume What you processed this month. Your baseline for calculating effective rate. |
| 2 | Total fees charged The sum of all fees — interchange, assessments, markup, and fixed charges combined. |
| 3 | Your effective rate Total fees ÷ total volume = your true all-in rate. This is the most honest measure of what you're paying. Most businesses should be between 1.7% and 2.5% depending on card mix. |
| 4 | Any unexpected fees Look for PCI non-compliance fees, chargeback fees, monthly minimums, or any line item you don't recognize. These are worth questioning. |
✓ NEXSYS offers free merchant statement analysis. If you want to know whether you're paying a fair rate — or whether switching pricing models would save you money — send your statement to your NEXSYS representative and we'll break it down at no cost.
If there's a line item you don't understand or a fee that looks off, don't ignore it. Your NEXSYS representative can walk through your statement with you line by line and help you understand exactly what you're paying and why.
Have questions about your merchant statement or processing fees? Contact your NEXSYS representative or reach us at support@nexsyspros.com.
| Section | What It Shows |
| Summary / Activity | Total sales volume, number of transactions, refunds, and net sales for the month. |
| Interchange Fees | Fees paid to the card-issuing banks. This is typically the largest fee category and is set by Visa/Mastercard — not your processor. |
| Assessment Fees | Small fees charged by the card networks (Visa, Mastercard, Amex) for use of their infrastructure. Also non-negotiable. |
| Processor Markup | The fee your processor (like NEXSYS) charges on top of interchange. This is the only part that's negotiable and where processor value is differentiated. |
| Monthly / Equipment Fees | Fixed charges such as statement fees, gateway fees, terminal rental, PCI compliance fees, or minimum monthly fees. |
| Chargebacks / Adjustments | Any disputed transactions, refunds, or manual adjustments applied during the month. |