What is a minimum monthly service charge?
It’s a floor under what your card machine provider earns from you each month. If the fees on your payments come to less than an agreed amount, the provider charges you the difference, as an extra line on your statement.
A made-up example
Imagine a café with a minimum monthly service charge in its contract.
In a busy month, the fees on its payments come to more than the minimum. Nothing extra appears.
In a quiet month, the fees come to less. A new line appears on the statement and tops them up to the minimum. However little the café took on cards, it pays at least that amount.
A month with no card sales at all can still cost the full minimum. That can catch out a business whose card machine sits in a drawer over the winter.
Why it catches people out
It only shows itself in a quiet month. Which is exactly when you’d rather it didn’t.
That’s why seasonal businesses notice it. So do new businesses whose takings are still building, and businesses that take more cash than cards.
What it might be called
Providers use different names. Look for “minimum monthly service charge”, “minimum monthly acquiring charge”, “minimum billing charge” or “MMSC”. Look in the monthly charges. In a busy month it may not appear at all.
It isn’t the same as a monthly fee
Some providers charge a fixed fee every month, however busy you are. It might be called an account fee, a service fee or a platform fee. A minimum charge is different: it only appears when your fees fall short. A contract can have one, the other, both or neither.
Questions to ask your provider
- What is my minimum, and which fees count towards it?
- Where is it in my contract?
- Can it be lowered or taken off?
For the rest of the statement, see how to read your card machine statement.