What is a monthly minimum & how is is calculated?
- by Jeff Cohen @ iMerchantNetwork.com

Many merchant accounts come with a monthly minimum.

Monthly Minimums are exactly what they sound like. They are a minimum amount that is charged to a merchant’s account for discount rates and transaction fees. This fee is usually charged at the end of each billing cycle.

Typical monthly minimum is $25.

EXAMPLES:

- You (the merchant) process $500 in gross sales volume in January.
- Your discount rate is 2.29%.
- You pay $11.45 in discount rates.
- You are also charged $3.00 in transaction fees for 10 sales at $.30 each
- This totals $14.45 in fees.
- If your monthly minimum is $25.00, you are simply charged the difference ($25.00 - $14.45)
- In this example the amount comes to $10.55.

- You (the merchant) process $6,000 in gross sales volume in February.
- Your discount rate is 1.65%.
- You pay $99.00 in discount rates.
- You are also charged $60.00 in transaction fees for 200 sales at $.30 each
- This totals $159.00 in fees.
- If your monthly minimum is $25.00, you are simply charged the difference ($25.00 - $159.00)
- In this example the amount comes to $0.
- You have exceeded the monthly minimum and owe nothing extra.

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