by Matt Rej
There’s a decent chance your merchant statement has a line on it for a program that you never agreed to use.
- Something your processor decided you should have.
- Enrolled you automatically.
- And started billing you for it.
That’s an auto-enrollment fee in a nutshell.
It’s a major money-maker for processors, and it works because the model is based on you not noticing what’s happening. And you end up paying thousands for something you probably don’t need and never opted into in the first place.
Auto Enrollment Fees Explained
To be clear, there’s no such thing as an “auto-enrollment fee” in any card brand fee schedule or processor fee list for that matter either. It’s not an interchange category, assessment, or network pass-through.
Auto enrollment is a description of a processor billing practice.
It’s when your processor puts you into an optional program and starts charging you for it. It could be a flat monthly rate per location or MID, and is sometimes based on transaction volume. Common candidates include PCI compliance programs, fraud tools, equipment protection plans, breach coverage, gateway add-ons, surcharge programs, and other value-added services (VAS) sold by your processor.
The two key words that matter most in that description: optional and sold.
If the fee were mandatory, you’d have nothing to argue about. But these are additional products or services offered as upsells by your processor that get added to your account without you asking. Often presented as an “upgrade” or even a free trial that later converts to a paid subscription.
They Live in the Hardest Part of Your Statement to Read
Auto-enrollment fees are a subset of your processor markup.
And any markup outside of your standard transactional pricing is already the most difficult thing on your statement to isolate. That’s true even before anyone tries to hide something.
Most statements don’t sort fees by who’s collecting them.
Network costs, brand fees, processor markups, and third-party program charges are all dumped into the same block of monthly or other fees. A pass-through cost from Visa that you have no ability to negotiate can sit two lines above a charge that exists only because a rep from your processor flipped a switch on an internal dashboard.
And nothing is ever labeled “auto enrollment.”
You’ll have a billing descriptor that might be a product name or an abbreviation that means nothing outside of your processor’s own billing system. It looks exactly like the fees around it because it’s designed to hide in plain sight.
Merchants reviewing their statements each month have a tough time determining whether a line item is a required network cost, a processor fee, or an optional program they were opted into.
That’s the reason this model works so well for processors.
Where Auto Enrollment Shows Up
Almost anything a processor sells outside of core processing can be attached to your merchant account this way. The programs and exact fees vary by provider, but the categories tend to be consistent industry-wide.
Here’s where we find most auto enrollment fees:
- PCI compliance
- Data security programs
- Fraud and risk tools
- Equipment protection plans
- Extended warranties
- Priority support tiers
- Breach and data compromise coverage
- Surcharge and cash discount programs
- Gateway add-ons
- Reporting dashboards and analytics tools
- Customer loyalty, marketing, and reputation management programs
Processors are all under immense pressure from stakeholders to find revenue beyond processing. Add-ons and upsells tend to be extremely profitable, so everyone is coming up with more products and services that they can charge for.
These types of tools don’t require any integration work from the merchant and they’re largely detached from the networks, which makes them so profitable for the processor.
But there’s a difference between a sales rep calling you and pitching a product vs. just adding it to your account and charging you anyway. The latter is an auto enrollment.
Real Examples of Auto Enrollment Fees
There are dozens of different auto enrollment fees used throughout the industry. But here are two examples that we see all the time, and they cleanly illustrate how processors apply this billing tactic.
FraudSight is a fraud detection tool that’s billed at $0.05 per transaction and $19.95 per month per merchant ID. It’s offered by Worldpay, and now that Global Payments owns Worldpay, we’re seeing Global automatically enroll merchants in a “free trial” of the platform. If you don’t opt out of the trial by a specific date, you’ll start getting charged.
PCI Plus from North is another common one that follows a similar model. Merchants get an email or statement attachment notifying them of a “complimentary upgrade” to the program. What’s unique about this is that North distances itself from the PCI Plus branding by sending you to a generic website that doesn’t include their logo, making it appear as if it’s coming from another party. Once upgraded, you pay an annual fee around $200 plus a monthly fee ranging from $20 to $90 based on your “tier” that’s somewhat arbitrarily calculated.
What do these fees have in common?
- Both are optional
- Enrollment happens by default
- Notices arrive in an email or statement attachment that’s easy to miss
- The framing is presented as a benefit: “free trial” and “complimentary upgrade”
- Amounts seem marginal at first glance until you run the numbers
None of this required your signature, acknowledgment, or confirmation. Your processor opts you in, and saying nothing counts as a yes on your end.
Why the Damage is Worse Than The Line Item Looks
$19.95 per month doesn’t seem like something to lose sleep over. These programs are often priced in ways so that picking up the phone to question it feels like a waste of your time. But the math changes when you account for the big-picture impact:
Per MID Charges: For a restaurant group with 30 locations and 30 merchant IDs, $19.95 turns into roughly $600 per month and north of $7,000 per year for a single program.
Transaction-Based Billing: If the fee is charged per transaction or as a percentage of your total volume, even a $0.05 or 0.05% can easily translate to thousands more.
Your Base Rate Never Changes: Nothing about an auto enrollment fee jumps off the page at you. If you’re just glancing through your statements while your rate remains the same, your effective rate can climb without you realizing it’s coming from additional processor markup.
Stacking Makes Them Worse: It starts with a free trial of a PCI program this year and then next year you’re enrolled into a fraud program. Two years later it’s something else. And by then, the amount of the first program you were auto-enrolled into has probably gone up.
It Sets Precedent: Processors pay attention to how you handle auto-enrollments. If you don’t question anything now, it gives them the green light to apply more aggressive billing tactics to your account down the road.
The Contract Clause That Makes This Legal
Most merchants who find one of these fees have the same reaction. Which is they never authorized the charge and the processor has no right to bill them something without permission.
The uncomfortable truth here is that you probably did authorize it.
Standard processing agreements give the processor discretion to enroll you in these types of programs without consent. It’s written as something your processor “may” do and not something that needs your signature for.
It’s among the same language they use to tell you that they can increase your rates at any time, too.
This matters for practical reasons because the “I never agreed to this” argument is one you’ll lose. But if you contact your processor and say, “This is optional. I don’t want it. Please credit it.” is one you can win.
How to Identify an Auto Enrollment Fee on Your Statement
You need to read through each line item individually.
Typically, you can skip through the interchange detail entirely. Nothing in this category is supposed to live there. But if your processor lumps all fees into one section, you’ll have to sort through those too.
Any descriptor you can’t immediately explain should be flagged and written down.
Then take that list to your processor and ask for them to put the following in writing for each item:
- The exact program name
- Any third-party vendor behind it (if applicable)
- Where the authorization for that fee came from: signed application, checkbox, email, contract section, etc.
- Whether it’s a one-time, monthly, or annual fee
- If it’s charged per location or MID
- What you actually receive for it
- If participation is required
- How to cancel, and whether cancellation triggers another obligation
- Whether fees already charged can be refunded
The most useful way to approach this exercise is by determining whether any line item is a network pass-through, processor fee, or a fee associated with an optional program.
Asking it in that way is hard for your processor to dodge.
Getting the Fees Removed and Credited
Optional fees means you can get them taken off.
Call your processor, identify the fee by name, and tell them to remove the service and all associated charges going forward. Make sure this is done for every MID, and not just the statement you happen to be looking at.
Get the confirmation in writing.
Next, ask for your money back. Request a statement credit for what you’ve already paid. There’s no guarantee they’ll honor the refund. But ask anyway. If they won’t do it, you can ask for other concessions instead.
Even if it seems like the phone call went smoothly and you received a confirmation in writing, you still need to monitor your upcoming statements to ensure the fee was actually removed. You’d be surprised how often these types of administrative “errors” happen or slip through the cracks.
Another thing worth stating clearly is that none of this requires you to leave your processor. Even if you feel like you’ve been duped, switching is more of a hassle than most businesses realize. Stick with your provider, and just get your pricing back to where it should be.
Final Thoughts
There’s nothing wrong with a processor selling additional products and services. Plenty of merchants can benefit from fraud tools and security programs.
The problem here is how you’re enrolled.
Nobody calls you or sends you a proposal. Your account gets a program switched on and a new line item starts hitting your statement.
What’s worse is when these are disguised as “free” or “upgrades” when in reality, they’re just an excuse for your processor to charge you more.
As VAS efforts continue to get pushed harder and harder by processors industry-wide, auto-enrollment programs are going to become even more prevalent than they are today. And that’s a big deal.
If you need help assessing whether you’re being charged for something you never agreed to or just want an extra set of eyes on your statement, contact me or my team here at MCC. We’ll audit your statements for free, and get things squared away with your existing processor to ensure you’re not being overcharged.