Pricing and compliance, in plain English

How card processing is priced, how to read a processing statement, and the rules behind cash discounts and surcharges. Use it to compare any quote you get, including ours.

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Five ways card processing is priced

Every quote you get uses one of these, or a mix. Knowing which one you're looking at is the first step to comparing them fairly.

How the five common pricing models compare. Interchange and card-brand fees are set by the card networks and are the same whichever model you choose. Scroll sideways to see every column.
Pricing model	How it works	What you see on the statement	Tends to suit	Watch for
Interchange-plus	You pay the interchange set by the card networks for each transaction, plus a fixed markup from the processor that's the same on every card.	Interchange and card-brand fees itemized, with the processor's markup listed separately.	Businesses with steady volume that want to see exactly what each part of the cost is.	Statements are longer, and the total changes month to month with your card mix.
Flat rate	One percentage, sometimes plus a per-transaction fee, applied to every card regardless of its type.	One rate applied to your total sales. Easy to read and easy to predict.	Smaller or newer businesses that value simple, predictable pricing.	You pay the same rate on low-cost debit cards as on premium rewards cards.
Tiered	Transactions are sorted into tiers, often called qualified, mid-qualified and non-qualified, each with its own rate. The processor decides which tier each card falls into.	A few tier totals, usually without showing why a card landed in a higher tier.	Mostly found on older contracts. If you're offered it, ask how cards are assigned to each tier.	Hard to compare with other quotes, and many cards can fall into the more expensive tiers.
Cash discount	Your posted prices include the cost of card acceptance. Customers who pay cash get a discount at checkout.	Processing fees still appear. The price difference you collect offsets them.	Businesses with a meaningful share of cash customers and prices that can be posted clearly.	Signs, receipts and how the discount is presented must follow card-brand rules and state law.
Surcharging	Your posted prices are cash prices. A fee is added when a customer pays with a credit card.	Processing fees still appear. The surcharge you collect on credit card sales offsets them.	Businesses with larger tickets or business-to-business sales where card fees are significant.	Can't be applied to debit or prepaid cards. Card brands require notice and cap the fee, and some states restrict surcharging.

Not sure which model you're on?

Send us a recent statement. In a free 20-minute call we'll tell you which pricing model it uses and what each line costs you.

Prefer the phone? Call 1-888-365-8876

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How to read a processing statement

Layouts differ from one processor to another, but most statements contain the same parts. Here's what each one tells you and what to check.

Sample statement for illustration only. Amounts are left at $0.00 on purpose, and your processor's layout and labels will differ.

Merchant statement

Statement period: month 1 to 30

Business: Your business name
Merchant ID: 000000000000

Account summary

Total card sales: $0.00
Refunds and adjustments: $0.00
Total fees: $0.00
Net deposited: $0.00

1. Account summary

Your merchant ID, the statement period, what you sold, what was taken out in fees and what reached your bank.

What to check: Divide total fees by total card sales. That's your effective rate, the easiest number to compare between processors.

Deposits

Batch, day 1: $0.00
Batch, day 2: $0.00
Batch, day 3: $0.00

2. Deposits

Each day's batch of card sales and the amount deposited for it.

What to check: Match these to your bank account. If fees are taken daily rather than monthly, deposits will be lower than the batch totals.

Card type summary

Visa: 0 sales
Mastercard: 0 sales
Discover: 0 sales
American Express: 0 sales

3. Card type summary

Your sales broken down by card network, with counts and totals.

What to check: Your card mix drives your cost. Premium rewards and business cards cost more to accept than debit cards.

Interchange and pass-through fees

Interchange, debit: $0.00
Interchange, credit: $0.00
Interchange, rewards and business: $0.00

4. Interchange

Fees set by the card networks and paid to the bank that issued your customer's card. Every processor pays the same interchange.

What to check: On interchange-plus pricing these should be passed through at cost. Ask whether yours are.

Card brand fees

Network assessments: $0.00
Network access and usage fees: $0.00

5. Card brand fees

Small fees charged by Visa, Mastercard, Discover and American Express for using their networks.

What to check: These are also set by the networks. A processor can't remove them, but shouldn't mark them up without telling you.

Processor fees

Discount rate (markup): $0.00
Per-transaction fee: $0.00
Authorization fees: $0.00

6. Processor fees

What your processor charges for its service. This is the part that actually differs between providers.

What to check: Compare these lines, not interchange, when you weigh one quote against another.

Monthly and annual fees

Statement fee: $0.00
PCI compliance program: $0.00
Gateway or software fee: $0.00
Annual fee: $0.00

7. Monthly and annual fees

Account fees charged whether or not you take a single card that month.

What to check: Look for a PCI non-compliance fee. It usually means a yearly questionnaire wasn't completed and can often be removed.

Chargebacks and adjustments

Chargebacks: $0.00
Chargeback fees: $0.00
Reserve held: $0.00

8. Chargebacks and adjustments

Disputed sales reversed by a customer's bank, any fee for handling them, and any amount held in reserve.

What to check: Respond to every chargeback by its deadline. Unanswered disputes are lost automatically.

Rolling reserves, explained

A rolling reserve is money your processor holds back from your deposits for a while, as protection against chargebacks and refunds it might have to cover.

Processors use reserves when a business is new to card processing, sells in a higher-risk category, takes payment long before delivering, or has a history of chargebacks. A reserve isn't a fee: the money is still yours and is paid out on a schedule.

Types of reserve

Rolling reserve: A percentage of each deposit held for a set period, then released. The most common type.
Capped reserve: Funds are held until the reserve reaches an agreed total, then holding stops.
Upfront reserve: A lump sum held at the start of the account instead of, or alongside, a share of deposits.

How a rolling reserve works

Step 1
A share of each deposit is held
The processor keeps back a set percentage of each day's deposits instead of paying out the full amount.
Step 2
Each amount is held for a set period
Every held amount stays in reserve for an agreed number of days, long enough to cover chargebacks that might arrive.
Step 3
Held funds are released on a schedule
As each holding period ends, that day's held amount is paid to you, so the reserve rolls forward rather than growing forever.

How to get a reserve reduced or released

Process steadily for several months without large spikes in volume
Keep chargebacks and refunds low, and answer every dispute
Keep your business details, website and policies up to date with the processor
Ask for a review. Reserve terms can be reduced or removed once you have a track record

Common fees, and what they mean

Names vary, but these show up on most statements. If you can't tell what a fee is for, ask your processor to explain it in writing.

PCI non-compliance fee: Charged when the processor has no record that you completed your yearly PCI self-assessment. Completing the questionnaire usually stops it.
PCI compliance or program fee: A yearly or monthly fee for access to the tools used to complete and track PCI compliance.
Annual fee: A once-a-year account fee, often charged in a single month, so it's easy to miss.
Early termination fee: What you pay to close an account before the contract ends. Check whether it's a flat amount or the remaining months' fees.
Chargeback fee: A charge for handling each customer dispute, separate from the disputed amount itself.
Batch fee: A small fee each time your terminal closes out and sends the day's sales for deposit.
Statement fee: A monthly charge for producing your statement, whether on paper or online.
Monthly minimum: If your processing fees fall below an agreed amount, you're charged the difference.

Surcharge and cash discount rules

Passing card costs to customers is allowed in many places, but card brands and some states set rules on how. These are the main ones.

Surcharges can only be added to credit card transactions, never to debit or prepaid cards, even when the customer signs instead of entering a PIN.
Card brands and your acquiring bank must be notified before you start surcharging. [PLACEHOLDER: Legal to confirm current registration and notice requirements]
A surcharge can't be more than your cost of accepting the card, and card-brand rules cap it. [PLACEHOLDER: Legal to confirm current caps]
Customers must be told before they pay, with signs at the entrance and the point of sale, and the fee shown as its own line on the receipt.
Some states restrict or prohibit surcharging. [PLACEHOLDER: Legal to confirm the current list of states and their rules]
Cash discount programs follow different rules: the posted price is the card price, and the discount for cash must be clear. Calling a surcharge a discount doesn't make it one.

Our Pay Net Zero program sets up either option on your terminal, with the receipts and signs that go with it.

Questions about pricing

Which rate structure costs the least?

It depends on your card mix, average sale and monthly volume. The only fair comparison is your own statement priced under each option, which is what we do in a consultation.

Why does my statement have so many fee lines?

Interchange-plus statements itemize every network fee, which makes them long but transparent. Flat-rate statements are shorter because the fees are combined into one rate.

Does TurnKey publish its rates?

We quote each business individually because interchange and risk vary by industry and card mix. Every quote is in writing and names every fee. [PLACEHOLDER: Decide whether to publish standard pricing]

What should I check before switching processors?

Your current contract's end date and early termination fee, whether your terminal is leased or owned, and whether it can be reprogrammed. We can help you read your contract.

What is an effective rate?

Total fees divided by total card sales for the month. It turns a long statement into one number you can compare between providers.

Do I have to be PCI compliant?

Yes. Every business that accepts cards must follow the PCI Data Security Standard, and most small merchants confirm it with a yearly self-assessment questionnaire.

Get your statement explained, line by line

Book a free 20-minute consultation. Bring a recent statement and we'll show you your effective rate and what we'd change.