What is a monthly minimum charge?
A monthly minimum service charge (MMSC) is a floor on the fees your provider earns from you each month. If your transaction fees fall below the minimum, you pay the difference.
Typical minimums range from £10 to £50/month. A £25 minimum means the provider earns at least £25 in transaction fees from you each month - if your turnover is too low, you top up to that floor.
When it hurts most
Seasonal businesses, holiday closures and quiet trading months. Low-turnover months can effectively double the effective rate you pay.
Example: a seasonal business processes £2,000 in January at a 0.9% blended rate = £18 in transaction fees. A £25 minimum adds a £7 top-up. The effective rate for that month is now 1.25%, not 0.9%.
How to spot it
Look for a line called 'minimum monthly service charge', 'MSC minimum' or 'monthly threshold'. Cross-check against total percentage fees for the month.
How to negotiate it
If your monthly eligible transaction fees consistently exceed the minimum, ask whether the minimum can be removed at renewal.
If it cannot, ask for a lower amount and calculate the annual effect using your quieter months. Get the revised term and effective date in writing.
Key takeaways
- Monthly minimums penalise quiet months and inflate your effective rate.
- Some providers waive minimums after negotiation, especially at higher volumes.
- Pay-as-you-go providers usually have no monthly minimum.
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