Credit card processors can charge fees using daily or monthly discount, and the discount method used will affect how total fees are calculated on a processing statement.

Daily Discount

On daily discount, a processor charges its qualified rate prior to settlement, and then charges credit card transaction fees, non-qualified rates, and other charges at the end of each month. Daily discount is identified by the existence of the term “less discount paid, on a processing statement.

To calculate total charges on a daily discount statement, fees paid throughout the month must be added to fees charged at the end of the month.

Monthly Discount

On monthly discount a processor charges all fees in one lump sum at the end of each month. Statements based on monthly discount are much easier to reconcile than statements based on daily discount.

Know your Effective Rate

Total fees for the month: $400
Total sales volume for the month: $10,000
Effective rate: $400 / $10,000 X 100= 4%

Know your Average ticket

Total sales volume for the month: $3500
Total transactions for the month: 100
$3500 /100= $35
Average ticket= $35