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September 28th 2020

Seven Reasons an Invoice Audit Could Save You Millions

As the global payments landscape continues to change, the fees that merchants pay to processors, networks and banks become ever-more perplexing. So, how can merchants ensure that they get the best service rates and protect themselves from significant card processing fees? Invoice audits are an option but… are they worth it?


Anyone familiar with the inherent complexity of merchant fees will know the difficulty of understanding exactly what they’re being charged for.

It’s therefore unsurprising that every 1 in 4* card processing invoices we see contains substantial errors.

We have conducted thorough invoice audits with some of the world’s largest merchants, and CMSPI analyses have unfortunately found that many merchants are consistently being overcharged millions of dollars every year.

Many of our clients have now achieved a six or seven-figure rebate from their processors.

But, what exactly is a card processing cost and why is it so easy to overcharge?

In this article, we’ll explain the ins and outs of merchant fees and how invoice audit services can save you millions.

What Are Card Processing Fees?

When a customer buys something via card payment method, there are fees associated with that purchase.

These transaction fees are predetermined by the merchant’s processor, but most of the time, they are immediately charged to the merchant.

Processors do not get 100% of the processing fees. Instead, merchant service charges consist of:

  • An interchange fee that goes to the issuing bank
  • A scheme fee that goes to the credit card company
  • An acquirer fee that goes to the acquiring bank

Card processing fees tend to correlate with volume, meaning that high-volume processors can expect their fees to average out overtime. For low-volume processors, however, this often has a negative impact on their business.

Card processing fees are just one (and typically the biggest) component of the overall “merchant account fee”.

Who’s Involved in Payment Processing?

There are many parties involved in payment acceptance, including:

  • The merchant
  • Banks
  • Payment processors
  • Credit card issuers

It’s important to note that “card processing fees” is a blanket statement.


Because the process of charging a credit card is intricate!

As you can tell, there are numerous players involved in the payments supply chain and routing – not to mention, different processors use different processing fee structures.

Are There Different Types of Fees?

In actuality, there are a lot of various fees attached to payments.

Which is why it can be so difficult for merchants to have clarity on their invoices.

Aside from card processing fees, service providers may also charge merchants for:

  • Statement fees
  • Minimum processing fees
  • Hardware fees (card terminals, etc.)
  • Cancellation fees
  • PCI compliance fees

Why MSC Invoices Could Contain Errors

There are many reasons that errors on merchant service charge invoices could occur. Below are the most common.

1.   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 merchant services rates are being charged correctly is extremely difficult with just monthly invoices.

2.   Umbrella Charges

In some instances, 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 to understand the individual components of these merchant payment processing charges.

3.   Rounding Up

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.

4.   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.

5.   Keying Errors

There are thousands of different possible charges that you might see on your invoices, and these are changing constantly.

This doesn’t mean that keying errors are just possible – it means they’re likely.

6.   Pass-Through Fees

Charges that card processors pass on to merchants from card networks can often contain hidden premiums.

These pass-through costs are extremely complex, and include factors such as exchange rate fluctuations, settlement timescale differences, and variations in pricing structures.

7.   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 often go unnoticed by merchants.

What is Invoice Auditing?

During an invoice audit, merchant account statements are thoroughly examined to uncover if and where merchants are being overcharged in their processing fees.

Merchants are then provided with a comprehensive breakdown of identified mistakes and projected savings should the excesses be negotiated or removed.

Invoice audits are performed by an unbiased third-party, meaning that merchants can find comfort in knowing that the valuable insights they recieve are honest and transparent.

How an Invoice Audit Can Help Merchants Reduce Cost

Scheme fee, acceptance cost, debit card charges… the list is never-ending.

The overall “merchant service fee” is confusing and often impossible to understand.

As mentioned, through multiple merchant evaluations, CMSPI has found that an alarming number of businesses are being overcharged. Therefore, an invoice audit could result in millions of dollars in savings for you.   

"These complexities make it impossible for merchants to independently audit their merchant service charge. Without the necessary information – as well as the 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 are overpaying by substantial six and seven-figure sums every year." - George Willis - Head of Strategic Partnerships

Let CMSPI Audit Your Invoices Today

It’s important to note that these excess costs aren’t necessarily lost forever. In a landscape where payments fees are ever-increasing, merchants can’t afford to assume their invoices are error-free. By conducting a thorough historical invoice audit, merchants could achieve significant reclaims.

Interested in our invoice audit process? Check out our cost reduction offerings and get in touch with us today!

* “1 in 4 invoices” is an estimate based on CMSPI’s client base.