A merchant processing statement can contain dozens of fees, percentages, abbreviations, and card categories. When everything is combined into one monthly total, it can be difficult to determine which costs are necessary, which are controlled by the processor, and where real savings may be available.
The Cost Comparison section of Mosaic Processing’s analysis is designed to answer those questions. It places a merchant’s current costs next to the proposed Mosaic costs and separates them into clear categories:
- Card-brand interchange and pass-through fees
- Processor markup
- Authorization fees
- Batch fees
- Monthly or regulatory fees
- Total monthly processing cost
The goal is not simply to present a lower total. It is to show exactly which expenses remain the same, which ones change, and how those individual differences create the estimated savings.
Why Processing Costs Must Be Separated
A merchant’s total processing expense is not one single fee paid to one company. Every card transaction can involve several parties, including the card-issuing bank, the card network, the merchant’s processor, a gateway or payment platform, and other service or technology providers.
Each may receive a portion of the total processing cost. If those expenses are bundled together, a merchant may assume its processor controls every charge on the statement. That is not the case.
A useful comparison separates the costs that are generally established by card networks and issuing banks from the pricing controlled by the processor. Without that separation, it is difficult to evaluate whether a proposal is realistic.
Card-Brand Interchange and Pass-Through Fees
Interchange and card-brand fees typically make up the largest portion of a merchant’s total processing cost. Interchange is generally paid to the financial institution that issued the customer’s card. The cost may vary based on factors such as:
- Card type
- Debit or credit
- Rewards level
- Consumer or commercial use
- Transaction method
- Business category
- Information submitted with the transaction
- Risk associated with the payment
Card networks may also charge assessments and other pass-through fees. These costs are generally not created by the merchant processor. A new processor does not make them disappear.
That is why a transparent comparison may show the same interchange and pass-through total under both the current provider and the Mosaic proposal. A difference of $0 in this category is not a lack of savings. It is evidence that the comparison is not pretending to reduce a cost that would remain essentially unchanged.
The most credible processing proposals clearly acknowledge this.
Processor Markup
Processor markup is the amount charged by the processor above the underlying interchange and card-brand costs. This is often where the most significant opportunity for savings exists.
Processor markup may include:
- A percentage added to transaction volume
- A per-transaction charge
- Different pricing by card brand
- Tiered or bundled pricing
- Other processor-controlled margins
Unlike interchange, processor markup is determined by the processing provider. In a side-by-side comparison, the current provider’s markup is compared with the markup proposed by Mosaic Processing. The difference between those figures shows how much of the estimated savings comes from reducing processor-controlled pricing.
This distinction is important. We are not claiming that Visa, Mastercard, Discover, or American Express will charge less simply because the merchant changes processors. We are showing that the processor’s portion of the cost may be reduced.
Why Processor Markup Should Be Evaluated Carefully
Markup is not always presented clearly on a processing statement. Some statements show it as a separate line item. Others distribute it across multiple card categories, transaction charges, or pricing tiers. It may also appear under unfamiliar descriptions that make it difficult to identify.
A statement could advertise what appears to be a competitive percentage while collecting additional revenue through:
- Higher per-item charges
- Nonqualified surcharges
- Monthly fees
- Gateway costs
- Batch charges
- Statement fees
- Other added expenses
That is why Mosaic evaluates the total markup and related processor-controlled costs—not just one percentage printed on a proposal.
Authorization Fees
An authorization occurs when the payment system checks whether a transaction can be approved. Authorization fees are often charged each time the merchant attempts to process a transaction. Depending on the provider and pricing structure, they may apply to approved transactions, declines, verification attempts, or other authorization activity.
These fees may appear small individually, but their impact depends on transaction count. A difference of only a few cents per authorization can become meaningful for a merchant processing thousands of transactions each month. For a business with relatively few transactions, the impact may be minimal.
The Cost Comparison shows the current and proposed authorization expenses so the merchant can see whether this category contributes materially to the overall difference.
Batch Fees
A batch is a group of transactions submitted for settlement. Many businesses close or settle a batch once per day. Some may process multiple batches depending on their locations, systems, or operating practices.
A batch fee may look insignificant, but it is recurring. For example, a difference of $0.25 per batch could equal approximately:
- $7.50 over 30 daily batches
- $15 across two daily batches
- More for businesses with multiple locations or settlement groups
The comparison identifies the merchant’s current batch expenses and shows how they would change under the proposed pricing. This prevents small recurring costs from being ignored simply because they are not percentage-based.
Monthly and Regulatory Fees
Monthly or regulatory fees can include several types of recurring charges, including monthly account fees, statement fees, PCI-related charges, regulatory fees, platform fees, minimum processing fees, support or service charges, and other recurring account expenses.
This category is especially important because the proposed amount is not always lower. A transparent analysis may show that one particular monthly charge increases under the new proposal. If that happens, the difference should be shown honestly—even if it reduces the overall estimated savings.
For example, Mosaic may offer significantly lower processor markup while a specific monthly or platform fee is slightly higher. The comparison should not hide that increase. It should show the negative difference and include it in the final total. That is what makes the analysis credible.
The goal is to lower the total processing cost and improve the overall arrangement—not to claim that every individual line item is cheaper.
Understanding the Difference Column
The difference column shows the financial impact of each proposed change. A positive difference represents estimated savings. A negative number means the proposed cost is higher in that category.
This allows the merchant to see:
- Which costs stay the same
- Where the largest savings occur
- Which smaller fees are reduced
- Whether any proposed fees increase
- How all changes combine into the total result
A proposal that only highlights its favorable categories does not provide a complete picture. By displaying both savings and increases, the Cost Comparison allows the merchant to evaluate the net result.
Total Monthly Cost
The final row brings all the cost categories together. It compares the merchant’s current total monthly processing expense with the estimated total under the Mosaic proposal. The difference between those totals is the estimated monthly savings.
This figure is more important than any single advertised rate because it represents the combined effect of interchange and pass-through costs, processor markup, transaction-related fees, batch charges, monthly expenses, and other pricing changes included in the analysis.
A proposal may offer a lower percentage but still create a higher overall cost if its other fees are excessive. Conversely, one fee may be slightly higher while the complete pricing structure produces meaningful total savings. The total monthly cost reveals the actual net effect.
Why the Largest Savings Often Come From Markup
In a properly structured interchange-plus arrangement, interchange and card-brand costs are passed through and shown separately from processor markup. Because those underlying network costs remain relatively consistent between providers, the primary opportunity is often found in the processor’s margin.
That does not mean every merchant will see dramatic savings. Some businesses already have competitive pricing. Others may have substantial processor markup or unnecessary fees that create a larger opportunity. The purpose of the comparison is to determine which situation applies based on the statement—not to assume the answer in advance.
A Better Way to Evaluate a Processing Proposal
When reviewing a processing proposal, merchants should ask:
- Are interchange and processor markup shown separately?
- Does the comparison use actual statement data?
- Are transaction and batch fees included?
- Are monthly and regulatory costs included?
- Does the analysis show any fees that increase?
- Can the projected savings be traced to specific changes?
- Does the proposed total reconcile with the detailed categories?
If the proposal cannot answer those questions, it may not reflect the merchant’s true expected cost.
Transparency Is the Point
A lower total is valuable, but understanding that total is equally important. Mosaic Processing’s Cost Comparison is designed to show the full calculation. It separates unavoidable network costs from processor-controlled pricing and accounts for both large and small recurring charges.
That gives business owners and finance teams a clear explanation of where their money is currently going and what would change under a new arrangement.
We do not believe merchants should be asked to trust a rate without seeing the math behind it. The comparison makes that math visible.