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Minimum Monthly Charges: A Lurking Menace Punishing Small Businesses

Merchant service statements are often a jumble of disjointed jargon. There are many words on a bill that business owners might not understand. Transaction charges, safer payments, minimum monthly charges. The latter of these charges, the minimum monthly charge, is the most damaging. It has been particularly menacing throughout the pandemic.

So, what is a minimum monthly charge?

A minimum monthly charge is a mandatory payment amount that businesses must reach, typically in the range of £10-20, paid to their card machine provider. If a business exceeds this charge through transaction rates, the minimum monthly charge is waived. However, the real issue arises when businesses fall short of this threshold.

Minimum monthly charges have been particularly detrimental to businesses forced to close during the pandemic. Despite not using their card machines, many businesses had to pay between £10-20 to their card machine providers, on top of terminal rental and safer payment charges. This practice allowed providers to profit significantly during the pandemic without offering a COVID-secure policy.

Fortunately for our clients, we implemented a different approach. Our clients were not charged if their operations were halted due to lockdown. Other providers might be more forgivable if these minimum charges included additional services, such as a single point of contact, discounts on till rolls, or a personal account manager. However, there have been no such benefits observed, making these charges purely profit-driven.

Minimum monthly charges also impact businesses during slower months. Since starting operations two years ago, many holiday parks have fallen prey to this charge. During busy seasons, like summer, holiday parks meet the minimum charge through transactions and avoid the fee. However, during off-peak months or winter closures, they are forced to make up the difference. For instance, if a park is charged £4.89 on transactions, it must pay an additional £15.11 to meet the £20 limit, on top of other charges, with no tangible benefits.

Such charges are fundamentally unfair. Businesses should not be penalised for card payments that were never made.

Bespoke Merchant Solutions stands against imposing minimum monthly charges, understanding the burden they place on businesses. We encourage businesses facing these charges to reach out to us. We are committed to rectifying this issue and saving your business money.

To learn more about Bespoke Merchant Solutions and how we can help you Do Business Better, get in touch today!

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