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October 30th 2020

Can You Solve the Mystery of the Invoice Errors?

It’s no secret that card processing arrangements are complex and opaque. So, it won’t surprise you that CMSPI analysis has revealed that many merchants in the U.S. are being consistently overcharged, often by millions of dollars every year.

We’ve helped some of the largest merchants in the world conduct invoice audits and the results have been alarming – often finding seven-figure overcharges.

1 in 2 of our audits uncover material errors and some merchants are particularly vulnerable depending on the nature of their payments mix and the players in their individual payments supply chain.

Often, merchants are able to reconcile their arrangements by comparing their processing invoices to their contracts, however, this approach will only uncover certain error-types. A merchant is unable to gain visibility beyond the information provided by the payments supply chain.

We see misapplied fees on a daily basis under various guises – and, in honor of Halloween season, and to raise awareness of Phantom Fees, we’ve created CMSPI’s very own ‘whodunnit’ board game, where you and your colleagues can play detective and identify where the merchant has been mischarged.

Want to solve the mystery? Download a printable version of the game pieces and instructions here.

The Suspects

The Weapons

Keying Errors
There are thousands of different possible charges that you might see on your invoices, and these are changing constantly. This doesn’t just mean that keying errors are possible: it means they’re actually likely.

Misapplied Rates
The varying rates applied to your transactions may be incorrect, as different payment types, channels and transaction values will incur different fees. With many charges being hidden in complex management information and opaque reporting data, having true visibility into whether these various rates are being charged correctly is extremely difficult with just monthly invoices.

Non-standard Transactions
Transactions that don’t fit into a distinct charging category can often incur excessive fees and, due to the complexity of the thousands of possible rates, these too often go unnoticed by merchants.

Pass-through Fees
Charges that card processors pass on to merchants from the card networks can often contain hidden premiums. These pass-through costs are extremely complex, including factors such as exchange rate fluctuations; settlement timescale differences; and variations in pricing structures.

Phantom Fees
Because your payments profile is inherently complex, your invoice breakdown will be just as complex. Different transactions will incur different fee types – leaving room for phantom fees to go unnoticed.

Although it may seem unlikely to constitute a significant cost, rounding up fractional fees can result in a substantial overcharge – particularly for merchants processing large volumes of card transactions.

Umbrella Charges
In some instance, smaller fees may be blended together on your invoice under an “umbrella charge”. Merging these fees together ultimately allows for a premium to be added to the headline rate, so it’s essential that you understand the individual components of these charges.


All of these complexities make it impossible for merchants to thoroughly audit their merchant service charge. Without the necessary information, internal resource and knowledge to navigate through that information, and without the industry insight needed to accurately benchmark what fees should be applied to what transaction, many merchants will be overpaying by substantial six and seven-figure sums every year.

These overcharges aren’t necessarily lost – conducting a thorough historical invoice audit could mean large reclaims are possible. In a payments landscape where fees are ever-increasing, the payments mix is shifting quickly, and merchants face an unprecedented external challenge, merchants can’t afford to assume their invoices are error-free – start your audit today.