What Is A Merchant Statement?

A merchant statement serves as a crucial document that is either electronically transmitted or physically mailed to client merchants by their payment processors or acquiring banks on a monthly basis at the end of each month.

Its primary purpose is to provide merchants with a comprehensive and detailed breakdown of their customer transactions, fees incurred, services rendered, and other information from the previous month. 

This statement acts as a vital tool for merchants to gain insights into their financial performance, track transaction volumes, analyze the types of transactions processed, identify associated charges, and reconcile their records accordingly.

Merchant Statement

Merchant Statement Analysis

By presenting a clear overview of their business activities, the merchant statement enables merchants to make informed decisions, assess profitability, and effectively manage their financial operations.

A merchant statement usually consists of the following components:

Significance Of The Merchant Statement

For business, merchant statements hold great significance. It serves as a comprehensive record that merchants use to track their sales, fees, and other transaction details, as mentioned above.

By carefully analyzing a merchant statement, merchants can get valuable information relating to their business performance, identify trends, and then make strategic decisions based on the information on the statement.

Providing the merchants with a breakdown of the costs and fees, merchant statements allow merchants to assess their processing costs and negotiate better prices if needed.

It also serves as an aid in financial planning for merchants by providing sales patterns and transaction details. This valuable information allows merchants to optimize inventory management, pricing strategies, and business expansion. 

Additionally, the statement helps merchants protect their business from potential financial losses and maintain customer satisfaction, as the statement plays a crucial role in dispute resolution, providing details about chargebacks and disputes.

Overall, understanding and utilizing the information in a merchant statement is essential for effective financial management and business growth.

merchant statement analysis

What To Do With A Merchant Statement

Although the merchant statements from different processors all have a different layout and style, they all share the same basic format. To make the most out of a merchant statement, a merchant must read the statement thoroughly and understand what it says:

The Basics

All merchant statements start with basic information about the merchant and the card processor. There's the processor’s name and contact information, business name and information, processing month, Merchant Identification Number (MID), and other fee-related details.

The Summary

As mentioned above, merchant statements usually come with a summary section. The summary section gives quick, at-a-glance information about the total sales, refunds, chargebacks, fees, etc. Reviewing this section gives an understanding of the business’ performance.

Processor’s Pricing Model

The pricing model depends on different merchant processors, and different merchant processors usually have more than one pricing model or plan. The four most common types of pricing models are membership/subscription, flat rate, exchange-plus, and tiered.


This is the most common type of pricing model. This pricing model categorizes transactions based on qualification status. Qualified transactions have the lowest cost, while on the other hand, unqualified transactions have the highest cost.


The subscription model is one of the newest and also one of the least common ones. Using this pricing model, merchants will have to pay a monthly subscription fee. This subscription fee usually covers most of the processor’s markup. In addition to this, merchants also pay separate transaction fees, which usually get smaller for larger transactions.


This pricing model lays out all charges in a list and usually separates the interchange fees (the fees of card networks, like Mastercard or Visa) from the processor's charges. This makes the costs and charges very easy to read and understand.

Flat Rate

This pricing model has a fixed rate for all the transactions, for example, 1.8%. This makes the pricing model the simplest, though it can result in being the most costly pricing plan. Hence, this pricing plan is so uncommon.

Checking The Discount

A monthly or a daily discount is what most payment processors usually apply to your charges. These discounts subtract charges from your total costs, giving you some savings. It is up to the merchant which type of discount they want, whether it be the daily discount or the monthly discount. Most of the time, merchants tend to choose the monthly discount. In the monthly discount, all the fees and savings are represented as one single figure, so it is easy to read and understand. The daily discount method provides a daily breakdown of the rate the processor charges, along with the discount savings.

Calculating The Markup Fees

It is good practice to work out the markup fees that a processor is charging. It allows merchants to see whether or not the payment processor has changed its markup fees. By subtracting the wholesale/base cost from the total charges, a merchant can calculate the markup fees that the payment processor has charged. Calculating the markup fees also enables merchants to determine whether or not there is a need to negotiate the markup prices. If needed, the merchant can try to negotiate the prices with the payment processor or even change the processor if the charges seem too much.


A merchant statement plays a crucial role as a vital tool for business owners and merchants. Merchant statements allow business owners and merchants to understand their financial transactions, fees, and overall business performance. 

Properly analyzing the merchant statement allows merchants to make decisions based on their sales trends, costs, and other valuable information within the merchant statement.

By understanding the basics of the merchant statement, merchants can quickly grasp the highlights of their finances. Additionally, determining the pricing model helps the merchants identify the breakdown of the costs between wholesale fees and markup fees. 

By checking the discounts applied to the charges and calculating the markup fees of the payment processors, the merchants can assess the competitiveness of their payment processor’s pricing.

By taking the time to review their merchant statements thoroughly, merchants can optimize their payment processing operations, negotiate costs and charges, and ultimately improve their business and profits.

Leo Scott Author Of Poslinksolution

Leo Scott

Leo has diverse working knowledge in departmental and chain stores, ranging from small convenience stores to multiple-location superstores. With in-depth knowledge of hardware for payment processing, he brings valuable insights to the table. Leo is a seasoned writer on topics related to insurance, finance, and technology.