Year-End Card Processing Fee Review

Why look at a full year, not one month

A single statement can look normal while the year tells a different story. Some charges appear once or twice a year, such as an annual fee or a compliance-related fee, and are easy to miss in the month they land. Small increases to a rate or a per-transaction fee can also arrive as a short notice inside a statement. Looking at twelve months together shows which costs are steady, which grew and which arrived without you noticing.

Background reading: The annual fee that lands in the month you are not watching · Rate creep: how to spot it

Step 1: Gather twelve months of statements

Download every monthly processing statement for the last twelve months from your provider's portal, or ask for them in writing. Include every merchant account you have: a second location, an online store or a separate account for phone orders each have their own statement. If you also pay a separate monthly fee for a point of sale system or rent a terminal, collect those invoices as well, because they are part of what card acceptance costs you.

Step 2: Build one simple table

The effective rate is the number that lets you compare months fairly, because it accounts for busy and quiet periods. If it moves noticeably while your mix of sales stayed about the same, find out why.

Step 3: Mark anything new, higher or unexplained

Go down the table and highlight three things: fees that appear for the first time during the year, fees whose amount went up, and lines you cannot explain from the statement itself. Then look through the notices and messages printed on each statement for the months where those changes start. For every highlighted line, ask your provider in writing what it is, when it started and whether it can be removed or reduced.

Step 4: Check your contract and equipment dates

Find the renewal date and the notice period in your processing agreement, and the end date of any equipment lease, which often runs on its own separate contract. Write the last day you can give notice in a shared calendar. If you are in Canada, the Code of Conduct for the Payment Card Industry gives merchants rights when a fee is added or increased, including the right to cancel without penalty within a set period, so a fee change found in this review may be worth acting on quickly.

When does your processing contract renew?

Step 5: Reconcile with your books

Your processing totals should match what your bookkeeping shows for card sales, refunds and fees. In the United States, card payments are also reported to the IRS on Form 1099-K, which shows gross payment amounts before fees and refunds, so your records need to explain the difference. Year end is a practical time to make sure the processor's figures, your bank deposits and your accounting software agree.

Form 1099-K for card payments · Bookkeeping for processing fees

What changes for multi-location and enterprise operations

With several locations, run the same table for each merchant account, then add a combined view. Differences between locations are often more useful than the overall average: one site paying a higher effective rate may have a different pricing plan, older equipment, more keyed-in sales or a contract signed at a different time. Finance teams should keep one register of every account, its pricing structure, renewal date and notice period, and give the year-end review a named owner so it happens every year rather than when someone remembers.

Effective rate by location and card type

Start the year with the numbers

If you would rather not build the table yourself, send us your recent processing statements. We will show you what you paid, where the cost sits and which lines are worth questioning. The statement review is free and there is no obligation to change anything.