What is a monthly minimum fee?
A charge that tops you up to a required amount of processing fees whenever your volume comes in low. Process a quiet month and the statement fills the gap between the fees you generated and the minimum the contract promises the processor.
From a merchant statement
Also billed as Processing minimum, Minimum discount.
Who charges it and why
The processor writes it into the contract as guaranteed revenue. It is framed as covering the cost of keeping a low-volume account open, but the account's fixed costs are already covered by fixed fees; the minimum exists to make small merchants pay like bigger ones.
What fair looks like
Fair looks like paying by the transaction: if you do not process, you do not pay. A seasonal shop or a new business should not be penalized for the months the model predicts will be slow.
Can you get rid of it
Check your agreement for the minimum before you sign anything new, and ask for it to be struck; some processors will for small accounts. On an existing account it usually stays until the term ends, which makes it a switching consideration rather than a phone call.
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Frequently asked questions
What is a monthly minimum fee?
A charge that tops you up to a required amount of processing fees whenever your volume comes in low. Process a quiet month and the statement fills the gap between the fees you generated and the minimum the contract promises the processor.
Who charges the monthly minimum fee and why?
The processor writes it into the contract as guaranteed revenue. It is framed as covering the cost of keeping a low-volume account open, but the account's fixed costs are already covered by fixed fees; the minimum exists to make small merchants pay like bigger ones.
Can you get rid of a monthly minimum fee?
Check your agreement for the minimum before you sign anything new, and ask for it to be struck; some processors will for small accounts. On an existing account it usually stays until the term ends, which makes it a switching consideration rather than a phone call.
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