Fixed Monthly Processing Fees: Add Them Up Separately

Two kinds of fees on one statement

Most processing statements mix two kinds of charges. Variable fees, such as a percentage of each sale or a fee per transaction, rise and fall with your volume. Fixed fees stay the same from month to month, or are set by your contract, no matter how much you sell. When everything is rolled into one total, the fixed part disappears from view. Separating it shows you what you pay simply to keep the account open, before a single card is run.

Monthly account or service fees

These go by many names: account fee, service fee, maintenance fee, customer service fee, or platform or software fee. Some accounts also carry a monthly PCI program fee. Each one should appear in your agreement or fee schedule with a clear description of what it pays for. If two lines seem to pay for the same thing, ask why both are there.

Statement fees

A statement fee is a charge for producing and sending your monthly statement. Some providers charge it even when the statement is only available online. It is usually small on its own, which is exactly why it tends to go unchallenged month after month.

Gateway fees

If you take payments online, by invoice or through some POS systems, a payment gateway connects your checkout to the processor. Gateways often charge a monthly fee on top of any per-transaction fee, and the monthly part is fixed. The gateway may be billed by a different company from your processor, so check your other invoices and bank debits as well as the processing statement.

Monthly minimum fees

A monthly minimum is not charged every month. It applies when the fees that count toward it fall below a floor set in your agreement, and you are billed the difference. It still behaves like a fixed cost, because it sets a floor on what you pay in slow months. Note the minimum amount and which fees count toward it, and look for the line in your quietest months, since it may never appear in busy ones.

Equipment rental or lease payments

Terminal rental and lease payments are usually billed monthly, sometimes by a separate leasing company and sometimes on the processing statement itself. A lease can run for a fixed term and may not end when you close or switch your merchant account, so read the lease itself, not only the processing agreement. If you pay an annual fee as well, include it in your list, since it is fixed even though it arrives once a year.

How to add them up

Take several recent statements and make a list of every fixed line: its name, its amount and who bills it. Add the fixed charges that are billed outside the statement, such as a gateway invoice or a lease debit from your bank account. Total them for each month. Then divide that total by your card sales for the same month to see what share of your card revenue goes to fixed fees. Do this for a slow month and a busy month. The fixed total barely moves, but its share of your sales changes a great deal, and the slow month shows you what the account really costs when business is quiet.

Why fixed fees matter more for lower-volume businesses

The same fixed total spread across fewer sales is a larger share of each sale. A business with modest or seasonal card volume pays the full fixed amount even in months when it barely uses the account. This is also why a quote that only mentions a percentage rate can look cheaper than it is. When you compare offers, add each provider's fixed monthly fees to the variable fees you would pay at your actual volume, and compare the totals.

What changes for multi-location and enterprise operations

Fixed fees are often charged per merchant ID, per location, per device or per gateway account, so they multiply as a business grows. Against large volumes each one may look small, but the number of accounts is what makes them add up. Start with an inventory: every merchant ID, terminal, gateway account and lease, matched to an active location. Accounts left open for closed sites, or equipment that is no longer used, can keep billing until someone cancels them. Look for duplicate gateways or software plans across locations. Then ask your provider for one fee schedule that covers every account, and raise fixed fees across the whole portfolio rather than one location at a time.