The Monthly Minimum Fee: Paying for Not Selling Enough

How it is usually calculated

A minimum is set by your agreement, not by the card networks. Visa's rules describe the merchant discount rate as a percentage a merchant pays its acquirer and list what it includes; a monthly minimum is a separate term your provider sets. The usual approach is to add up the fees that count toward the minimum, such as discount or markup fees, compare that total with the minimum, and bill the shortfall. Illustrative example only, with made-up round numbers: with a $25 minimum and $10 of qualifying fees in a slow month, you are billed a $15 minimum fee. With $30 of qualifying fees you pay nothing extra. Your agreement may count different fees, so check its definition.

Who it affects

Minimums weigh most on businesses with low or uneven volume: seasonal businesses, new businesses, and businesses that take cards occasionally. A business with steady volume above the threshold may never see the line. Illustrative example only: a shop with $500 of card sales in an off-season month and $5 of qualifying fees would pay a $20 shortfall on a $25 minimum, which is 4% of that month's card sales on top of normal fees.

Minimums and total monthly fees

Some merchants compare offers by the monthly fee total a salesperson quotes. In its July 2022 complaint against First American Payment Systems, the FTC alleged that the company's typical pricing included monthly fees charged regardless of processing volume, that agents represented total non-transaction monthly fees would not exceed amounts such as $20.00, $15.90 or zero, and that most merchants in those sales channels were charged more. In 2013 the FTC alleged that Merchant Services Direct agents quoted one per-transaction fee without mentioning the other fees. These are allegations about specific companies. They show why you should get every monthly fee, including any minimum, in the written fee schedule.

In Canada, the Code of Conduct puts the fee in writing for you

If you process in Canada, you do not have to rely on asking the right question. The Code of Conduct for the Payment Card Industry in Canada, which came into force on October 30, 2024, requires a payment processing agreement to carry a cover page with three tables: a Summary of the Key Elements of the Agreement, a Cost per Transaction Disclosure, and a Disclosure of Fees, presented in a manner that is simple, clear and non-misleading. A monthly minimum is a fee, so it belongs in that disclosure. The Code also governs what happens when a fee changes: an acquirer must give notice 30 to 60 calendar days before the effective date of a fee increase, a new fee, or a reduction that is not matched, and the notice must state the previous and new amounts, identify who changed the rate, and set out the merchant's right to give notice of intent to exit the agreement within 70 calendar days after the effective date of the change. If you give that notice, the provider must send cancellation documents within 5 business days. On renewals, a fixed-term agreement cannot automatically renew for the length of the original term; renewals are limited to periods of 6 months or less, and a merchant giving notice of non-renewal must do so at least 45 calendar days before renewal. The practical effect for a minimum is direct: if one is added or raised mid-term, the notice is the trigger for a penalty-free exit, and the 70-day clock runs from the effective date, not from the day you notice the line on a statement. US merchants have no equivalent federal code; there the fee schedule and the termination clause in your own agreement are the whole of your protection.

Find it on your statement

Look in the account or monthly fees section for a line labelled minimum, monthly minimum, minimum discount or minimum processing. Check your slowest months, since the line may not appear in busy ones. Then find the clause in your agreement that sets the amount, the fees counted toward it, and whether the provider can change it with notice.

How to remove or avoid it

Ask your current provider in writing to remove or lower the minimum, and get the change confirmed in writing. When comparing providers, ask directly whether there is a monthly minimum and what counts toward it, and ask for a fee schedule that lists all monthly fees. If your business is seasonal, ask whether the account can be kept open without a minimum in months with little volume. This is general information, not legal advice (September 17, 2026).