Monthly Minimum Fee
A guaranteed minimum amount that merchants must pay their payment processor each month, regardless of actual processing volume, with any shortfall charged as an additional fee.
The monthly minimum fee ensures that payment processors receive a minimum revenue from each merchant account, regardless of transaction volume. If a merchant's processing fees for a given month fall below the monthly minimum threshold, the processor charges the difference as an additional fee. For example, if a merchant has a $25 monthly minimum but only generates $15 in processing fees during a slow month, they would be charged an additional $10 monthly minimum fee.
This fee structure primarily affects low-volume merchants and seasonal businesses that experience fluctuating sales. A merchant processing $5,000 monthly at 2.5% effective rate generates $125 in fees, easily exceeding typical monthly minimums of $15-$50. However, a merchant with only $500 in monthly sales would generate just $12.50 in fees, triggering the monthly minimum shortfall charge.
Monthly minimums are negotiable terms in merchant agreements, with amounts varying based on processor, merchant risk profile, and business type. High-volume merchants may negotiate the elimination of monthly minimums entirely, while low-volume merchants should seek the lowest possible minimum or processors that don't charge monthly minimums. Some processors use monthly minimums as a deterrent to inactive accounts, while others view them as essential to covering account maintenance costs. When comparing processor pricing, merchants should factor monthly minimums into their total cost analysis, especially if they expect variable or low transaction volumes.
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3D Secure
An authentication protocol for online card transactions that adds an additional verification layer between the cardholder and issuing bank, shifting fraud liability from merchants to card issuers when properly implemented.
ACH Payment
Automated Clearing House payment is an electronic bank-to-bank payment method that transfers funds directly between bank accounts through the ACH network, typically used for direct deposits, bill payments, and recurring transactions.
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A financial institution that processes credit card payments on behalf of merchants, maintains merchant accounts, and facilitates the settlement of funds from card-issuing banks to merchant bank accounts.
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A fraud prevention tool that compares the numeric portions of a billing address provided during a transaction against the address registered with the card-issuing bank, returning match result codes to help merchants assess transaction risk.
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A payment service provider that enables multiple merchants to process card transactions under a single master merchant account rather than each merchant having their own dedicated merchant account, common with services like Square, Stripe, and PayPal.