Calculating the Monthly Minimum in Interchange Plus Pricing

When a credit card processing pricing program has a monthly minimum provision, it means that the merchant service provider is requiring the merchant to generate a set amount of fee revenue each month, or pay the difference between the amount of fee revenue and the minimum. For example, if a merchant account has a $25 monthly minimum and the merchant generates $20 in fee revenue, the merchant must pay an additional $5 to reach the minimum for the month.

It is very important for the merchant to understand what portion of the fee revenue counts toward the monthly minimum. Usually, Interchange and Assessment fees that are not paid to credit card processor do not count toward the monthly minimum. Only fees for Processing Services that are paid directly to the credit card processor count toward the minimum. Some programs only count fees paid on Visa and MasterCard sales, while others count fees for processing services on Visa, MasterCard, and Discover. In most cases, Amex transactions do not count toward the monthly minimum. Some programs count all Processing Services discount and transaction fee revenue toward the minimum, others only count one or the other toward the monthly minimum. In most cases, a monthly service or statement fee does not count toward the monthly minimum.

Monthly minimums can be tricky with interchange plus pricing because the fees for processing services are usually fairly low. For example, if an account is priced at interchange plus 0.10% + $0.10 per authorization, and only the discount rate for Processing Services counts toward the monthly minimum, the merchant will need to generate $25,000 in V/MC sales each month to avoid paying extra to reach the minimum ($25,000 x 0.10% = $25.00).

Burlington Bank Card strives to provide our merchants with secure and reliable interchange plus merchant payment processing, transparent pricing, one-on-one personal service, and no monthly minimums.

Please call 1-800-758-1002 or contact us to learn more about Interchange Plus Credit Card Processing, or get a quote for an Interchange Plus Merchant Account.