Billback and Enhanced Billback…Buyer Beware

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One of the most confusing billing methods in the credit card processing industry today is the billback (BB) method. Chances are, you don’t even know what it is. What’s worse is that billback spawned itself an offspring called enhanced billback (EBB), which is even more complex than the original. To add even more confusion, the names for these types of billing methods change regularly. It’s almost like the processors do it on purpose in order to keep you in the dark. For example, here are some other names for Billback:

  • Enhanced Reduced Recovery (ERR)
  • Blended Rate
  • Mixed Rate

If you don’t read any further, my only suggestion would be for you to avoid billback and enhanced billback. However, some of you may already be under billback and not even know it. If that’s the case, then I suggest you keep reading…or send me your statements and I’ll let you know.

First things first, let’s define billback and enhanced billback.

Billback Definition

To understand the definition of billback, just take a closer look at the name….billback. That means that you will be billed back for some stuff that you weren’t billed for in the first place.

Here’s how it works…

The processor quotes you a flat rate of say 1.79% for ALL of your transactions for the month. But, if you know anything about interchange, then you know that not all transactions are created equal. Some transactions will have higher rates than others, even higher than 1.79%. That’s just the way VISA and MasterCard made the system. There are no exceptions! A rewards card will have a different interchange rate than a debit card.

So, if the processor is charging you 1.79% for every transaction, but not all of those transactions end up qualifying for that rate, then how does the processor recoup the difference?

The processor ends up charging you 1.79% for every transaction for that month regardless of what interchange category the transaction qualifies for. Then, in the following month, they look back at those transactions to see what rates they actually did qualify to and charge you for the difference on your next statement.

So, in effect, you end up needing two months worth of statements to figure out what the hell the processor has charged you in total for that specific month. Think that’s bad? Let’s define Enhanced Billback aka Enhanced Reduced Recovery.

Enhanced Billback Definition

Think billback, but just think of the “enhanced” part as enhanced margin. As in, more profit for the processor.

The only difference between billback and enhanced billback is that the processor “enhances” the billback part with their own little margin. I’m not even making this stuff up. The word enhanced literally means that they enhance the billback with more margin. Wow!

How to Identify Billback

I’m sure by now you’re thoroughly confused, and your eyes have probably glazed over. Trust me, even I had a rough time understanding this, but I suggest that you don’t over-analyze it, and don’t freak out. Here’s a visual to help you identify if you’re under billback or enhanced billback:

(Click to Enlarge)

Notice the “BB” in red? That stands for billback. Notice the Statement Period in green? It’s for May 2011, but notice the billback charges in blue? They’re for the previous month (April 2011).

You’ll have a similar statement if you’re under enhanced billback, expect instead of “BB” it will have the acronym “EBB.” Same with Enhanced Reduced Recovery (ERR).

So, all you have to do is search for those terms on your statement and you’ll be able to quickly find out if you’re on billback or enhanced billback. If so, I highly recommend that you contact your processor and have them change it, or use a processor that doesn’t use billback (like CDGcommerce).

Amad Ebrahimi
Amad has worked in the eCommerce and online marketing world since 2002. He started as an eBay seller, then slowly graduated to building & marketing his own websites and consulting others to do the same. He founded Merchant Maverick out of frustration with all the misinformation and shady tactics that he encountered when trying to find a merchant account for his and his client's businesses. He's the man behind most of the merchant account reviews, and articles posted on Have any questions related to credit card processing? Talk to him.
Amad Ebrahimi
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    Hi, I work for a small ISO/MSP company in canada that used First Data processing. At first I thought I was working for a legit company. Then I researched it and I see that most of the shady ISOs are dealing with First Data. Now by no means am I saying that my company is one of the shady ones because so far so good. But now I have signed up big accounts with clients that have followed me in sales over the years. I am scared that I have set them up with the devil. How do I find out if my company is predatory or an honest company?


      I was just looking into (quiq) for my small business. I like the idea of a virtual terminal so I can run payments anywhere. But the reviews for them are pretty bad. I did talk to a rep and he said my account is ERR, 1% flat for qualified cards, 3% for non-qualified, plus a 25 cent fee on all transactions, and a monthly $7.95 cust. service/statement fee. Also I have to charge a min. of $2500 a month to avoid the $25 discount fee. Does this sound good? It’s all very confusing and I wonder how we are supposed to choose a reputable, fair, merchant in this online age. Do you recommend certain companies? thanks in advance

        Chloe Bahal

        Hi Rebekah,

        It sounds like your pricing is tiered, which we recommend staying away from. Interchange-plus is the ideal pricing structure since it is the most transparent. I would recommend taking a look at any of our top rated processors. I hope this helps but if you need more guidance, you can contact me here.

          Gwen H.

          I feel so vulnerable after reading the comments of others. I personally created my own webstore via I didn’t know they only worked with Stripe, Moolah, Paypal, and Wirecard. I went straight into First Data after a friend recommended them because he use them with his company and happy with it. I haven’t made my first sale yet because I cannot get First Data accepted onto Wix. I feel I am working very backards right now and should start over with a different web host. I was liking First Data until reading these stories and now I’m scared to death!!!! My shop is small and very new. Please advise.

            Amad Ebrahimi


            If FD has you under contract with an early termination fee, then you’re kind of stuck with them. Unfortunately you’ll have to switch your webstore to another platform that can integrate with FD. In regards to negative comments about FD, they’re a very large company there they’re bound to have a lot of negative reviews. We think they’re a 4-star provider which is not bad by any means.


              Sandra Hope

              Who do you recommend for account audits?

                Sandra Hope


                Who do you suggest that I hire to audit my merchant account. I was on a rolling reserve for six years with Calpian Commerce and my calculations tell me that they stole from 380,000.00 to 500,000.00. Any suggestions?

                  Amad Ebrahimi

                  Hi Sandra,

                  I can actually provide the audit for you. I’ll send you an email to discuss.


                    walter hodgdon

                    so how can we take down wells fargo merchant services. I am leaving this “not so up front company”. so far to cancel , has cost me over $1000.00 for First Data and Wells Fargo is charging me $500.00. since feb 2014 to march 2015 i have been robbed by them to the sum of &6500.00 over the regular fees. these were all BB, IC the worst thing right now is just trying to get the rep to call me or his boss. I will use what ever social media i can get my fingers on to reveal this company, as the fraud they are. thanks for listening


                      Thanks for this great information. I was just approached by Prestige Payment Systems by a cold call. Their rates seem great up front (1% discount fee and 5 cents per transaction) but after seeing there $107.00 a year lease I backed away. They called me back and tried to convince me that has I have been on a 3 year agreement already what’s the difference. I said no way am I doing a non-cancellable lease and hung up. Two minutes later they called back and said what if we do away with the 4 year lease agreement? Still got a bad feeling about this company and said no again. After further looking at the contract information Discount Page they sent me I noticed that the stated Pricing Plan said: Discount w/Enhanced Billback. Wasn’t sure what that meant. Now I do. Thanks again. You just confirmed my suspicion that this company would have been a bad idea.

                        David Glover

                        I just got my account approved through Wells Fargo Merchant Services. I am a baby with this process, but my eyes is open now, thanks. What can I do to protect myself from these tactics

                          Bill Hoidas

                          Thanks for posting! I’ve been deciphering these types of statements for years. You might also mention someday about the daily discount trick which makes the monthly statement fees look much cheaper than they really are.

                            Amad E.

                            Thanks Bill. We’re working on a monthly vs daily discount article as well. I’ll let you know when it’s posted.

                            Take care!

                              Bill Hoidas

                              Great! Besides making the statement hard to decipher daily discounts should only be used for risky merchants. Merchants should be on monthly discount so they get their full batch amount every day.

                                Amad E.

                                Very true!

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