In short: A dormancy fee is a charge on a payout account that has sat unused for a set period. Most payout providers charge these fees and keep all of them. At Paymenture, the fees are disclosed up front and shared 50/50 with the company that runs the program.

Why it matters: If you pay thousands of distributors, affiliates or contractors, some accounts will go quiet. You should know what happens to those balances, who sets the rules, and who earns the fees.

What is a dormancy fee?

A dormancy fee (sometimes called an inactivity fee) is a fee charged to a payee's account after a long stretch with no activity. Activity usually means logging in, receiving a payout, transferring funds or withdrawing money.

At Paymenture, an account becomes dormant after 120 days of inactivity. Any dormancy fee is paid by the payee from their account balance, under terms they see before it applies.

Why do payout providers charge dormancy fees?

Inactive accounts aren't free to keep open. Even with no money moving, a provider still has to:

  • Keep the account secure and monitored
  • Run ongoing compliance checks, including KYC, AML and sanctions screening
  • Store records and keep balances reconciled
  • Contact payees about unclaimed funds

A dormancy fee helps cover those costs. It also nudges payees to collect their earnings rather than leave money sitting in an account they've forgotten.

Who usually keeps dormancy fees?

In most payout programs, the answer is simple: the provider keeps 100%.

The company running the program brought in the payees, built the relationship and handles their support questions. But the fee income from their inactive accounts goes entirely to the payout provider. Many companies don't know these fees exist until a distributor asks about a charge on their statement.

That's a fee stream coming from your own payee base, and you have no visibility into it and no share of it.

How Paymenture handles dormancy fees

We think dormancy fees should be disclosed, compliant and shared.

  • Disclosed. Payees see the dormancy terms before they apply, including the 120-day inactivity window. We also send payees an email reminder before their account goes dormant, so they have time to act.
  • Compliant. Our dormancy fee policy has been through compliance review, and fees are applied consistently under published terms.
  • Shared. Dormancy fees are split 50/50 between Paymenture and the client company.

This is part of our wider revenue-share model, where companies earn a share of the fees their payout program generates rather than treating payouts as a pure cost. You can read more in Who Keeps the Fees? How Revenue Share Turns Commission Payouts Into Revenue.

A fairness checklist for dormancy fees

Whoever your provider is, a fair dormancy policy should meet these standards:

  1. Clear terms up front. Payees know the rules before they're enrolled, not after a fee shows up.
  2. A reasonable inactivity window. Long enough that active payees are never caught by surprise.
  3. Advance notice. Payees get a reminder, such as an email, before an account goes dormant, so they can act.
  4. Easy to avoid. A simple login or transfer resets the clock.
  5. Consistent rules. The same policy applies to every payee in the program.
  6. Transparency for you. You can see which accounts are dormant and what fees were charged.

6 questions to ask your payout provider

If you're reviewing your current provider or comparing new ones, ask:

  1. Do you charge dormancy or inactivity fees? How much, and when do they start?
  2. How many days of inactivity make an account dormant?
  3. How are payees notified before a fee applies?
  4. Who keeps the dormancy fee revenue? Is any of it shared with us?
  5. Can we see reporting on dormant accounts and fees charged?
  6. Has your dormancy policy been through compliance review?

If the answers are vague, or the provider keeps all of the revenue, you're likely leaving money on the table. For a broader list, see How to Choose an MLM Payout Provider: 10 Questions.

See how shared fees work for your program

Dormancy fees are one part of the picture. Paymenture lets you pay distributors, affiliates and contractors in 200 countries and 145+ currencies through one platform, and shares the fees your program generates.

Book a personalized demo to see how revenue share, including dormancy fees, would work for your payout program.