Merchant Statements and Statement Analysis
How to Build a Merchant Statement Benchmark
Building a merchant statement benchmark is essential for businesses seeking to understand and optimize their payment processing fees. By comparing your merchant processing costs against industry standards and similar businesses, you can identify areas to reduce expenses and improve your overall payment strategy. This guide explains how to create an effective benchmark using your merchant statements.
Steps to Build a Merchant Statement Benchmark
Start by gathering a representative sample of your merchant statements over several months. Consistency in data collection helps ensure accuracy in your benchmark analysis. You can optionally use a tool like Merchant Statement Scanner to upload and scan PDF statements, which simplifies data extraction and comparison.
Key Metrics to Include in Your Benchmark
- Total processing volume and transaction count
- Effective rate (total fees divided by total volume)
- Interchange fees and assessment fees
- Processor markup and additional fees
- Chargeback and retrieval fees
Once you have these metrics, compare them against industry averages or benchmarks from similar-sized businesses in your sector. This comparison highlights whether your fees are competitive or if there are opportunities to negotiate better rates or switch providers.
Using Your Benchmark for Continuous Improvement
Regularly updating your merchant statement benchmark allows you to track changes over time and measure the impact of any adjustments you make. Consider scanning new PDF statements each month to maintain an up-to-date view of your processing costs.
Practical next steps include reviewing your benchmark data with your payment processor, exploring alternative providers, or consulting with a payment processing expert to optimize your fees. Using a merchant statement analysis tool can streamline this process and provide actionable insights.
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