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• You are being charged the negotiated rates stated in your agent Schedule A
• The authorization fee is accurate. For example, if your authorization fee is supposed to be $.08, and the
report shows you are being billed $.10, you have a problem.
• Go through all the major fees for each contract, including:
• Statement Fee
• Authorization fee
• Pre authorization fee
• AVS fees
• Account on file fee
• Risk Monitoring Fee(normally in basis points)
• Debit/EBT Authorization fee
• Batch fee
• Voice Authorizations/VRU
• Online Reporting fee
• PCI fee
• Chargeback
• Retrieval
• Gateway fees

If you have any trouble matching things up, Karawadra counsels you to request the raw data from the ISO/Processor. They
may be reluctant to comply, but in most cases, you have contractual rights to view it. Zahara Alarakhia, Esq of Payments
Law Group, said, “Agents are entitled to residual reporting, but each processor’s reporting system is different. Agents
should look to their agreement and ensure any reports provided in connection with residual payments offer sufficient
detail to allow them to verify the accuracy of the amount of the residuals paid.” Evaluating your processor’s raw data
confirms how they calculated the residual. If your processor is proactive, they will also provide a key on the calculation
formula. It is time consuming, but the effort is worth it. Even the best processors/ISO’s make mistakes and it’s not always
an intentional error. Nevertheless, they won’t do the leg work for you, so you will need to audit your accounts yourself.
Notifying Your ISO/Processor
If you have identified an error in your residual payout, you’ll need to notify your ISO/Processor immediately. If the error
is theirs, and they are not billing the merchant the correct fees or overcharging you, they will need to rectify it. Also,
many contracts only allow agents to go back so many months for back payment. Karawadra urges you to become familiar
with this clause of your agreements, keeping in mind you need to do your evaluations on that timeline. If your contract
says six months, then it is best practice to do your audits every six months at a minimum. “In this competitive industry,
we have to remember profit margins are slim in most cases,” Karawadra closed. “It is easy to get bogged down with daily
duties and miss an opportunity to collect monthly residual payments we may not have received.”

For more information about Impact PaySystem, visit www.impactpays.com.

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