Minimum monthly charges: a lurking menace punishing small businesses

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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 minimum payment amount that a business must reach. This amount is paid to their card machine provider and is typically in the region of £10-20. If a business pays over this charge on their transaction rates, then they do not have to pay the minimum monthly charge. The real problem, however, is when a business does have to pay this charge. 

Minimum monthly charges have been particularly punishing for businesses who had to close during the pandemic. Because the card machine was not being used, many businesses had to pay between £10-20 to their card machine provider. This charge is in addition to their terminal rental and safer payment charge. That’s absurd! Providers were able to pocket a fortune during the pandemic as they did not supply their clients with a COVID secure policy. 

Luckily for our clients, we did. Our clients did not have to pay a penny if their operations were halted due to lockdown. I would be slightly more forgiving on other providers if the minimum monthly charge came with additional services. A single point of contact, discounts on till roll, a personal account manager? But there isn’t. From my experience I have not seen a single business benefit from having to pay these extra charges. It is all for profit on behalf of the supplier. 

Minimum monthly charges also punish businesses when they have a slower month. Since beginning our operations two years ago we have seen a lot of holiday parks, for example, taken pray by the charge. During busy seasons, such as summer, holiday parks do not have to pay their monthly charge. This is due to their business meeting the set minimum charge as the terminals are being used. Yet, during less busy month’s (and being closed for winter) holiday parks have been forced to make up that amount. If a park was charged £4.89 on their transactions, then they must fork out an additional £15.11 in order to meet that £20 limit. As a reminder, this charge is in addition to other charges with no foreseeable benefit. 

I repeat; such a charge is absurd. In my professional opinion, businesses should not be charged for card payments that were never made in the first place. 

It’s rare for me to input my own voice into these blogs, nevertheless, I am proud to work for Bespoke Merchant Solutions. We do not add minimum monthly charges to businesses as we understand how unfair it is. It’s why I ask businesses to reach out to us if they find these charges on their bills. We will be happy to correct this wrong and save your business some money.

If you want to learn more about Bespoke Merchant Solutions and hoe we can help you Do Business Better, get in touch today! 

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April 24, 2023
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