Small Business & Startups

Can Businesses Set A Minimum Amount For EFTPOS?

Many businesses display a “minimum transaction value” for EFTPOS or impose surcharges, but are they allowed to do that? And what practical recourse do you have if they do?

Image: Newtown Grafitti

It happens a lot; you wander into a store, look around and find an inexpensive item that you decide to buy, but you’ve got no folding or clanking type cash on you, You whip out the plastic card, only to find a notice at the till informing you that you’ll either have to meet a minimum value to use EFTPOS, or incur a surcharge for doing so. What’s the legal position for this kind of thing?

The first point to make is that an EFTPOS card isn’t a credit card; we’ve covered off the fact that from January 1st this year, credit card surcharges have to be “reasonable” in their scope. That doesn’t mean they’re illegal, but they should more closely reflect the cost of doing business. As such, while an EFTPOS transaction and a credit card transaction are different critters, if a business does insist on EFTPOS minimums, paying via credit card may be cheaper for small purchases.

The distinction between a credit card and an EFTPOS transaction is an important one, however, simply because while the ACCC has ruled on credit card fees, it has remained silent so far on the EFTPOS issue. Anecdotally, EFTPOS surcharges seem less common than credit card ones, so it’s possibly a lesser issue, but the fact remains that there’s no binding ruling that states that a merchant has to offer reasonable EFTPOS fees.

What do the banks have to say about this? It varies from provider to provider, although you should be able to tell which particular financial services provider a given merchant is using; I’ve never known an EFTPOS machine not to bear a lot of bank branding. The Commonwealth Bank, for example, makes it quite explicit in its merchant agreement that minimums on EFTPOS are a no-no:

2.3.3 No minimum transaction amount
You must not impose any minimum transaction amount for card transactions.

but it does allow for surcharges to be applied, as long as they’re made clear up front:

2.3.2 Notifying customers of any surcharge
If you charge a fee for card transactions, you must clearly and prominently display any charges that might apply before processing the transaction.

The NAB, on the other hand, doesn’t block minimum transactions as such, but merchants are apparently required to seek permission from the bank:

(h) not state or set a minimum or maximum amount for a nominated card transaction without our prior written consent.

With a tip of the tips hat to @chrisjrn, searching for the name of the financial institutuion plus “merchant services” will usually bring up the details of the merchant agreement for the EFTPOS/Credit Card terminal, from which you can ascertain the rules that the bank has set. Although again, there are rules, and there’s reality; while the position taken seems to vary bank by bank, there’s no obligation for the merchant to actually put through the transaction if you refuse the minimum or surcharge, even if they are breaking the rules. You could report them — but you won’t be buying your widget that day.

Which brings us inevitably to the question of what you do when faced with a minimum or a surcharge for EFTPOS. The simplest approach if this hits you as a problem is to take your business elsewhere. Businesses aren’t obliged to take a particular payment method — not even, technically speaking, actual currency — and you’re not obliged to shop with that business. If a business wishes to make life difficult for you, choose someone friendlier — if you can.
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