Enter your Industry, monthly Bankcard Sales, Average Ticket and Billing Amount to calculate your Real Rate and see how it compares with industry peers.

More on how to calculate your Real Rate.

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What is my Real Rate?

Reading a merchant statement or shopping for processing quotes today can be confusing. And comparing merchant account billing from one provider to the next is a challenge, as each has a different format and billing terminology.  Marketing materials showcase “rates as low as” and you hear terms like qualified, non-qualified and Interchange pass through. Then you have to factor in the batch fees, annual fees, compliance fees, retrieval fees, authorization fees, early termination fees, etc.

So how do you cut through all the clutter? Understanding the factors that impact your bottom line cost of accepting card payments starts with learning how to calculate your real rate. Because what really matters is the service charge debited from your checking account, your real rate represents your true bottom line, all-in cost (the percentage of total fees on bankcard sales).

Study this statement example:

How do I calculate my Real Rate?

  1. Pull one of your recent monthly bankcard merchant statements.
  2. Locate the sum of all total charges and fees and write it down here:  X=_____ (total fees debited from your business checking account)
  3. Calculate the total bankcard sales and write it down here:  Y=_____ (What you are looking for here is your total cost of service for processing bankcard sales. Don’t include sales volume on American Express cards since you get charged on a separate AmEx statement for these card sales.)
  4. Calculate your real rate: X / Y = ______%   (multiply by 100 to format as a %)

Using this real rate formula is a good way to manage your bottom line cost of service and easily track these expenses over time.