Merchant Services
What are merchant services?
Merchant services are the tools and accounts that let a business accept card payments, including a payment processor, an acquiring bank, a gateway for online sales, and terminals for in-person sales. The business pays merchant fees for each transaction, and deposits arrive in the bank account after fees are taken out.
Numetix is the expert-led, AI-powered, human-in-the-loop bookkeeping layer that reconciles card deposits to sales reports every month, so processing fees and chargebacks never hide inside a net deposit.
Where the fees come from
- Interchange: a fee paid to the card-issuing bank on each transaction
- Assessments: fees charged by the card networks
- Processor markup: the provider's own charge, which varies by contract
- Other charges: monthly fees, gateway fees, and chargeback fees, see processing fee
Worked example
The figures below are illustrative. A business processes $10,000 of card sales in a day. Total fees are $290, or 2.9 percent, so the bank deposit is $9,710.
- Record gross sales of $10,000 as revenue
- Record $290 of fees in a merchant fees expense account
- Record the $9,710 deposit in the bank account
Recording only the net deposit understates both revenue and expenses and makes margins look better than they are.
How to control and reconcile
Match each deposit to the processor's settlement report and then to sales records. Review statements for rate changes and unexpected fees. Track chargebacks and refunds separately so disputes are visible. Our guide to payment processing integration explains how to connect these feeds to the books.
Frequently asked questions
Why does a card deposit not match sales?
Processors deduct fees, refunds, and chargebacks before depositing, and deposits are batched by settlement date. The deposit usually equals gross sales minus those items, shifted by a day or two. A settlement report shows the breakdown for matching.
How are chargebacks recorded?
Record a chargeback as a reduction of revenue or a separate loss account, plus any chargeback fee as expense. If the business wins the dispute and the funds return, reverse the entry. Tracking them by cause helps spot fraud or service issues.