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Merchant Sales Insight

5 Reasons Not to Analyze Processing Statements

Merchant Sales Podcast · 5 Reasons Not to Analyze Processing Statements – And Why You Should Anyway

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With the rise of Cash Discounting and fast are pricing, why should you analyze a processing statement? There are five primary reasons why agents and ISOs choose not to collect and analyze processing statements. However, as you will see in this week’s edition of the Merchant Sales Insight, you might be leaving value on the table. Here are 5 reasons NOT to analyze processing statements and why you should anyway.

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Let’s face it: analyzing merchant account statements is inherently boring! No merchant services sales rep ever gets up in the morning and says, “Gee, work is going to be fun today. I get to hunker down and analyze merchant statements.”


For starters, statement analysis can be a tedious process. That’s why some ISOs staff entire departments with analysts. The analysts’ jobs are to pour over merchant statements submitted by sales reps. Of course, sales reps submitting statements for analysis by an ISO are already operating at a disadvantage.  They came away from a merchant call with just a statement but not much else. Every successful sales rep I know pushes the sales process as far as possible on the spot. Taking a statement to analyze at a later time does little to advance a sale.


With the rise of flat-rate pricing and Cash Discounting, this seems like a good time to re-examine the need for even conducting a statement analysis. After all, variables like “qualified” and “mid-qualified” don’t factor into the merchant’s cost when you are selling these now popular options.  

As Founder and CEO of ISO Amp, the leading full-service statement analysis company, I felt it worthwhile to explore this question. It has been our experience from servicing hundreds of ISO clients and analyzing thousands of merchant processing statements every month, that statement analysis always yields worthwhile results.


In this issue of the Merchant Sale Insight,I have compiled a list of the top five reasons why ISOs and agents might not perform statement analysis.  I’ve also included some reasons they should.
Throughout, I will reference ISO Amp, an automated statement analysis tool I developed and have been fine-tuning since 2014. ISO Amp helps ISOs and agents quickly identify ways to save merchants money without cutting into margins. In fact, by using ISO Amp, an ISO/agent can actually tailor proposals to desired margins. From quick assessments to detailed analysis, ISO Amp gives the capacity to analyze statements and deliver detailed professional proposals in a matter of minutes. 


Here are five reasons not to perform statement analysis and explanations of why these reasons don’t carry much weight. 


#1 – When Margin Doesn’t Matter


Recently, a client offering compliant surcharging to a merchant used ISO Amp to upload a merchant statement and received a detailed report back a few minutes later. The client immediately reached out to say the tool had made a mistake.  Even though the merchant was being switched from traditional interchange plus pricing to compliant surcharging, the report showed no monetary savings for the merchant.
After reviewing the analysis, my team informed the client that this particular merchant had a very low average ticket size and did many debit transactions, which do not qualify for the surcharge pricing template. Under the client’s pricing template, the merchant would eliminate fees on credit card transactions, but additional debit card fees would eat up the savings.


Fortunately for this ISO, running the merchant’s statement through ISO Amp allowed them to propose a different pricing template – one that saved the merchant money and preserved the ISO’s margin.

Another example: a new agent thought it would be a great idea to offer a large coffee shop cash discounting with a 3.84% flat rate.  However, the agent didn’t realize that the interchange effective rate alone was over 4%.

For the experienced agent offering flat rate pricing/Cash Discounting to a physical location merchant with an average ticket above $25.00, margin may not matter. It can be safely assumed that this account will be very profitable. However, even in these cases, a quick savings analysis using ISO Amp allows agents to pinpoint merchant savings with precision and better understand their expected margin, without ever requesting processing statements. 


All that is required with the Quick Analysis feature are a few data points, such as monthly volume and total monthly fees. The agent can feed the numbers into ISO Amp while talking with the merchant and receive a proposed quote instantaneously via email or text.
At the end of the day, statement analysis isn’t just about identifying savings. Margin counts for a lot.  As we see the race to the bottom starting all over again with Cash Discounting, the margin calculation will quickly become important again as agents evaluate the profitability of an account before writing a deal.
The ISO Amp team has been trained to work with clients to accurately load their schedule A costs into the system and build pricing templates. They can even predetermine desired margins on each transaction and account.
Whether uploading a statement and receiving a detailed, line-by-line analysis, or punching in a few high-level numbers to get a quick estimate, ISO Amp always shows margin on each fee to be charged to a merchant. This means ISOs and agents can make pricing decisions that protect their interests while also giving them the flexibility needed to close profitable deals.


#2 – When Card Mix Doesn’t Matter


I can’t imagine a situation where card mix doesn’t matter, except perhaps, in those rare situations where a merchant only accepts one type of card. This occurs in some high-risk merchant situations, like medical marijuana shops that only accept cash or PIN debit. But these are one-off situations.


Truth is, card mix always matters. Different types of cards may or may not qualify for certain pricing considerations.


Debit card transactions, for example, can have a huge impact on pricing. Due to federal rules in the Durbin Amendment, interchange on most debit card payments is capped at $0.22 and 5-basis points. These restrictions make debit card volume the top card mix consideration when estimating interchange.


Debit card payments can be very profitable when selling Cash Discounting. However, it is still important to understand the underlying costs of interchange and card brand fees when providing slightly lower non-cash adjustment fees for larger clients. This requires a system that pulls card mix information from the statement or estimates these numbers from the data available.


American Express cards present another variable in account analysis. Most small businesses accepting AmEx qualify for OptBlue. OptBlue offers participating businesses lower processing rates than traditional AmEx acceptance. This means ISOs and agents can assess pricing that more closely aligns with traditional card fees, and benefit from higher margins.


Commercial cards add yet another variable to the mix.

 These may qualify for interchange optimization. 


When ISOs/agents upload a merchant statement to ISO Amp, they can view all the details of an entire statement – all the tables. They can –

  • perform a line-by-line analysis, 
  • identify any padding, 
  • adjust fees as needed, 
  • and determine desired margin. 
  • From there, they can create a professional looking proposal for the merchant, detailing proposed costs and savings over the current processing arrangement.  


#3 – When Interchange Optimization and Padding Don’t Matter


It’s safe to say that some businesses don’t lend themselves to interchange optimization. Nail salons, for example, aren’t apt to be accepting commercial cards.However, that’s not out of the question. What’s to say local employers won’t use a company card to reward staffers with mani-pedi packages? 

Chances are that exceptions like this exist in every vertical. If you’re not willing to identify potential savings a prospect can realize from interchange optimization, probably another agent who IS willing will come along. Even on flat rate or Cash Discounting deals, not analyzing for optimization opportunities can result in losing a sizeable margin. 

A business with many transactions which qualify for optimization savings who is on Cash Discounting, could offer a lot of extra profit margin without sacrificing any merchant savings. 


Understanding interchange rules and the data capture requirements needed to qualify for the best interchange on all the different types of cards a business might accept and quickly identifying anomalies isn’t in most agent skill sets. Agents prefer to spend time selling. I get it. That’s why they need a tool like ISO Amp – interchange optimization is just one of the ways ISO Amp helps minimize merchant downgrades and improve margins.

Padding matters, too. Nobody wants to pay more for a product or service than necessary, no matter what they are buying. 

Merchant processing fees are easy to pad – 

  • There are many wholesale prices that can be marked up. 
  • Increasing processing, authorization/transaction and/or interchange by a few basis points is commonplace in this industry.  
  • Increasing monthly fees by a few dollars is also commonplace.  
  • Every processor has a unique format, in some cases multiple formats, for detailing costs.
  • Even terminology and abbreviations can vary from one merchant statement to another.  

ISO Amp uses an artificial intelligence engine built on a foundation of tens of thousands of merchant statements from hundreds of processors. When ISOs/agents submit a statement for analysis, ISO Amp pulls the entire interchange table for comparison. Plus, it identifies padding and opportunities for optimization. Then it delivers all this information to the ISOs/agents who can choose which savings to include in their pricing template before generating a detailed professional proposal for a prospective merchant. 


#4 – When Pricing Adjustments Don’t Matter


Sure, if you are only selling Cash Discounting, having the ability to adjust prices may not matter. But not all agents are selling cash discounting, and not all merchants are convinced that Cash Discounting is the way to go. 

When selling traditional pricing, adjusting prices can be a confusing process. You certainly don’t want the necessity of pouring over a merchant’s statement trying to make adjustments to secure the sale while sitting in front of the merchant!

ISO Amp eliminates the tedium and extra steps needed to adjust pricing. The sales rep just submits a statement, and ISO Amp does all the grunt work.

  • Detailing in real time, 
  • Potential merchant savings, 
  • Agent margin. 

Once the analysis is complete, the agent can use the savings slider to adjust the pricing and margin as needed.


ISOs can preload their unique templates with default values into ISO Amp.  Then agents are allowed to change assumptions as needed to produce the most accurate quotes. ISO Amp features a convenient slider tool that allows agents to test targeted margins and merchant savings assumptions. They can even make special requests, such as desired split of savings between merchant rate reductions and margin. 

 #5 – When Presenting a Professional Proposal doesn’t matter


Why would an agent not want to appear professional? An agent might look the part of an astute business person and propose significant savings for a merchant. However, most businesses are not going to seriously consider a proposal that isn’t easy to understand, or worse, is penned on the back of an envelope or processing statement.

There may have been a time in the early days of this industry when a proposal written on the back of an envelope and a handshake was enough to secure a merchant account, but those days are long gone. Professionalism is valued, and professional proposals have become a staple of this business. 

We have a large client that uses ISO Amp to support in-house telemarketers who just sell Cash Discounting. The telemarketers obviously don’t collect statements. But they do use ISO Amp to create hundreds of proposals each month with basic information provided by prospects (e.g.: total volume and total fees). They text professional-looking proposals to those prospects while they’re on the phone.

ISO Amp features a library of templates.  It can also create custom proposals in PDF or Excel format and provide these to agents to present to prospects.


There are really no good reasons for not performing merchant statement analysis, especially when tools like ISO Amp make the process so clean and simple. ISO Amp builds on years of experience conducting statement analysis. Using proprietary algorithms, ISO Amp can compare a statement to tens of thousands of others and conduct required calculations to generate winning proposals.


ISO Amp was developed to address the pain points typically associated with statement analysis. 

  • It can identify with pinpoint precision all possible merchant savings opportunities. 
  • It can identify desired ISO and agent margins. 
  • It creates professional-looking proposals in just minutes. 
  • It will analyze card mix, leverage optimization, uncover instances of padding, and make adjustments on the fly to determine pricing strategies that work best for each prospect.


Using ISO Amp to perform a quick savings analysis, ISOs/agents can identify exactly how much money they can save a merchant, without ever needing to upload a statement. By entering just a few data points (such as monthly totals of card payments and interchange), ISO Amp will detail savings a prospect can expect and the structure of fees to be expected on the new statement. 

  • Results are calculated in just a few minutes. 
  • Results are reviewed by trained analysts when necessary.
  • Results are delivered via email or text messaging.


With additional data points, like volumes associated with different types of cards, ISOs/agents can create detailed proposals for any type of pricing schemeand generate quality, professional proposals in a matter of minutes. ISOs can load their own templates into ISO Amp to generate proposals that meet their specific requirements. Or they can leverage our extensive library of proposal templates. 


In its most advanced mode, ISO Amp supports a deep-dive approach. This allows agents to upload a merchant statement with a detailed analysis and savings proposal generated in as little as twenty minutes with same day turn-around guaranteed. They can even review all details and change assumptions on the fly to meet any desired outcome.


We provide everything from detailed templates incorporating such things as interchange optimization and padding to basic templates that display proposals with simplicity.


Serious savings and margins are the holy grail of merchant services. ISO Amp automates statement analysis for ISOs and their sales reps, leveraging their unique pricing strategies and completing the proposal process in real time. 


With ISO Amp, ISOs can outsource statement analysis with confidence. 

  • Every platform. 
  • Every pricing structure. 
  • No exceptions. 
  • The system can be fully branded for your ISO – from branded portal, to logo and color scheme, to proposal documents. Your branding stands out through the process.


Contact us today to schedule a free demo.


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