If you have ever opened a merchant processing statement and immediately closed it, you are not alone. These documents are dense, inconsistently formatted, and deliberately opaque in places. But buried inside every statement is a single number that tells you most of what you need to know: your effective rate.
Step One: Find Your Effective Rate
Your effective rate is total fees divided by total volume. Some statements calculate it for you; most don’t.
Example: If you processed $60,000 last month and paid $1,620 in total fees, your effective rate is 2.7% ($1,620 ÷ $60,000).
Benchmarks by business type:
- Under 2.0% — you’re in good shape
- 2.0–2.3% — reasonable, but worth reviewing
- 2.3–2.6% — above average, likely on flat-rate pricing
- Above 2.6% — you are almost certainly overpaying
For health and wellness practices specifically, an effective rate above 2.2% on primarily in-person card-present transactions is a signal that your pricing model needs attention.
Step Two: Identify Your Pricing Model
Look for one of these terms on your statement:
Flat rate / Simple rate / One rate — a single percentage applied to all transactions. Easy to read, but usually expensive. Square, Stripe, and Mindbody Payments use flat-rate pricing.
Tiered pricing — transactions sorted into “qualified,” “mid-qualified,” and “non-qualified” buckets with different rates. Common with banks. The tier definitions are set by your processor, so rewards cards and business cards often end up in expensive non-qualified tiers without explanation.
Interchange-plus / Cost-plus — the actual Visa/Mastercard interchange cost shown separately from the processor markup. The most transparent and typically the least expensive for established businesses.
Step Three: Look for These Common Fee Traps
Monthly minimum fees — charged if your processing fees don’t reach a minimum threshold. Usually $25–$50. Fine if your volume is consistent; wasteful if it varies seasonally.
PCI non-compliance fees — some processors charge $15–$40/month if you haven’t completed your annual PCI questionnaire. This is avoidable; the questionnaire takes about 20 minutes.
Statement fees, batch fees, IRS reporting fees — small line items that add up. $10 here, $5 there. Worth noting but rarely the main issue.
Early termination fees — not on your monthly statement, but in your contract. Before switching processors, check whether you’re in a term agreement and what the exit cost is.
What to Do With This Information
Once you know your effective rate and pricing model, you can have an informed conversation with your current processor — or start shopping alternatives. A good processor should be able to show you a side-by-side comparison of your current costs versus what you’d pay under their pricing.
At Beacon, that’s exactly what a free statement audit delivers: your current effective rate, your projected rate under interchange-plus pricing, and a written monthly savings estimate — in 48 hours, no obligation. Use our pricing calculator for a quick estimate before you even send us your statement.