Can Businesses Set A Minimum Amount For EFTPOS?

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?

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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.   Lifehacker’s weekly Loaded column looks at better ways to manage (and stop worrying about) your money.


    • I always get a min purchase ammount on paywave / paypass as well as the standard chip and pin. I go in to a cafe to buy a coffee and they refuse unless i buy something else to bump up teh value to $10. if your on a diet then that cake just isnt worth it and i’m not buying 2 coffee’s

      • Im with you there. My hubby wanted to buy a tattslotto ticket worth $8.55 and refused him, didnt offer for him to spend on something he may have needed, he said thats not legal, thus my being on website and finding you. He said make it up to the ten dollars. So the girl serving him did and he was expecting change. He got nothing, not even a thank you. I rang after we got home and was told they dont do cash out. What the???????

    • Trust me, paypass and paywave make it a lot more worse. The fees a merchant is charged for customers to use paypass/paywave are a lot higher than regular machine use. I know at work, our charges are 30c for each VISA paywave and 15c for Mastercard paypass, on a $3 coffee (or worse $1 cookie) that translates to a 10% and 30% extra cost price on the retailer.

      No wonder the little businesses are struggling these days. Before I worked at the cafe I was ignorant on the fees merchant’s were getting charged too. Blame the banks, not the businesses, they have to enforce these minimums and surcharges just so they can continue running their business at all.

  • EFTPOS is free to merchants in New Zealand, so everyone uses it almost all the time. I even buy a single coffee with my card. The plus side of this is that people now rarely carry cash. I’ve just come home from a week away where the only cash I spent was to play pool on a rainy afternoon.

      • I moved here also from NZ two years ago and immediately wondered what was going on with the $10 min I seemed to encounter at a lot of businesses. Also some businesses don’t even have eftpos and its 2013! I had my own retail store in NZ so I really noticed this…phenomenom! that seems unique to Australia. How on earth is it possible that NZ is more advanced in ‘point of sale’ technology than Australia yet they have the monopoly on our banks??!! I have never encountered an eftpos minimum in NZ. We also had a manual system that we could use should the eftpos system go down. I walked into a business the other day an their system was down, he had lost a bit of money and so I asked if he had a way to do it manually…didn’t even know what I was talking about. I find the Minimum thing so outdated and really unprofessional.

  • Australian consumers are the most gullible, most stupid one of the lot.
    Americans will not put up with such crap, There is no minimum set on using card in America. Yet look how their retail flourish compared to here, always the latest stuff always replenishing their goods with the newest and the latest when available.
    Unlike here, Telstra will sell the latest Optimus G in March 2013 and fool customers here that it is the very latest when it is not. Harvey Norman selling anything from last year? Of course.

    • Consumers in the US are (unwillingly) subject to minimums and service fees all the time. The merchants are usually breaking the terms of the banking agreements. However, you still see signs that say “Minimum purchase for debit card use is $x.xx” or “Fees apply for purchases under $x.xx”. I see it all the time there – especially at small retailers.

      I don’t disagreee that Australian consumers aren’t getting ripped off by their own willingness to put up with fees. Or paying more for downloads that are cheaper in the US.

    • American’s also tip, you can’t tell me that’s not evidence of a broken system. Particularly since it seems you need to tip to even get passable service, rather than it being a reward for good service.

  • I’ve worked at plenty of places with an enforced minimum in the past, and in the last few years have been abolishing them from places that i manage with a simple ethos: if you make it easier to pay, people will buy more stuff.

    seems to be working so far.

    • The sooner retailers realise this better! Do they want to take my money and make a profit (albeit small and minus eftpos costs) and potentially secure future business, or do they want me to take my money elsewhere permanently? Nine times out of 10 I will walk out of a shop and never go back if they have tried to impose an eftpos minimum on a transaction.

      • 100% correct. If a store charges me for sauce with a pie I am dissuaded from returning but if their product is great I may return. However if an outlet refuses to sell due to using EFTPOS I immediately launch a revolt against that outlet.

    • First rule of sales – make it as easy as possible for the buyer to buy your goods / services.

      Put an obstacle in the way (surcharges) and they will go elsewhere.

    • Guess your not the owner then that has to pay a flat fee on any transaction regardless of the amount. Glad you are not trying to run my business

  • most small transactions cost the shop a minimal amount and the more it gets used the more it comes down. When it costs the shop less than 15 cents to swipe your card, if your spending over $5 I think they should charge nothing…. its like 3%, their margins for amounts like this are probably in the 30-40% anyways. at $10 its more like1.5%. Maybe do some research into the best deals for eftpos machines, they are a necessary evil and only one shop in town(large) that I know of that does not have one.

  • It is there to cover the phone call the machine makes to the bank to process the fee and also the charge the bank gives the merchant (shop) as a % on each transaction. Fair enough I say.

    I would rather a small surcharge than a minimum spend.

  • The other interesting thing I remember is that I think both MasterCard and Visa have stated publicly that they’ll immediately withdraw services from any merchant that charges a Minimum.

    Apparently the consumer were to report it to their bank, and MasterCard or Visa wanted the banks to close the merchant accounts immediately. – So if I was a merchant, I’d be very careful about charging minimums on credit-cards.

    Unfortunately now I can’t seem to find the particular info I recall seeing. – My quick searches show that a recent change in the U.S. Federal laws mean both companies have recently changed their policies for the U.S. (The info I found now shows that the Credit Card companies don’t want merchants to charge minimums, just the law now says they can in the U.S. so anywhere out-side the U.S. I think they’ll still try and get the merchant account closed.)

  • This is simple.

    No minimums, no fees.


    • Apart from car dealers, who want to charge you an exorbitant amount for having the car delivered to the dealer. It’s not like you have to pay delivery fees when you go into a supermarket and buy a box of weet-bix. is it:

      Weet-bix: $3:00
      Supermarket delivery charge: $0:25
      Supermarket de-boxing charge: $0:25
      Supermarket shelving rental: $0:25


      • Well… the freight is calculated into the cost price.
        Of course supermarkets buy by the container so the freight is fairly minimal, but it is there.

    • Amen! I just tried buying a single scoop $5 icecream from one of the most prominent tourist spots in bne and encountered this ugly facet of aussie business…… Again. What’s the problem with working in the cost of eftpos into the business? Surely it’s better than handling folding?

  • Just like lawyers, for example, who don’t charge you for photocopying because it’s part of the business. Or banks, who never charge fees for basic services.

    Oh, wait.

  • I have merchant facilities for retail store. I don’t put any considerable amount through it (under 10-15k a month) and I get charged around .90ish %. This is without any group discounts through associations or volume discounts. The rate was set when I signed up. There is No Excuse for a business to charge more than 1% anymore. Take your business else where if they do. If they are dumb enough to be paying anything more, then their customers shouldn’t be penalised.

  • what’s worse than fees are the fact that alot of places still dont offer eftpos as a payment method. the entire foodcourt in my local shopping center only take cash… painful..

    • I hate this! The local bakery has this aswel! In this day and age where you can use a mobile phone as a payment device (commbank kaching case) some businessess only take cash

  • I remember reading an excellent article in the Sydney Morning Herald a few years ago by Ross Gittins on EFTPOS charges. Finally managed to find it.

    Based on this (and I don’t know if the situation has changed) while retailers are expected to pay banks a small fee for credit card transactions, the fee is significantly smaller for EFTPOS transactions. Although somewhat strangely, most small retailers I visit have a higher limit for EFTPOS vs credit cards, or they don’t accept EFTPOS at all….seems kinda strange

    • We have a small business doing market stalls. I looked into getting a eftpos machine and they charge 2.5% for Visa or MasterCard and 55 cents for EFTPOS. I can understand why some businesses do not accept EFTPOS as the business has to pay a fee for every transaction. It is up to the business if they which to pass on the fee to the consumers….

  • It really took some adjusting moving here from New Zealand. I never carried cash, there was no need, but I am constantly finding cash only or minimum purchase things here. The upside is I saved over $1000 in spare change because I got sick of carrying coins.

  • I do wish Australia wasn’t the greediest nation on earth (and that won’t ever change) and that we weren’t bled dry just to use EFTPOS.

    I also wish people wouldn’t defend greedy little shopkeepers who insist on $10 minimum transactions to cover their piddly 50c fee! It’s robbery, it’s rampant greed and it’s despicable.

    Ned Kelly didn’t die. He’s alive and well and running small business in Australia.

  • Newspaper profit is about 20c, one small chewing gum in convenience store profits 50c, and a packet of small chip probably has 80c profit. If the EFTPOS fee the bank charge is 20c (20-30c for EFTPOS is quite common). It will mean that the poor small business will not make any money on newspaper, 40% off the profit of the chewing gum, and about 25% off the profit on the chips (on single item buy) – Has anyone experienced 100% or 40% or 25% discount on their wages? – no? How do you think it feels?. Unfortunately not all small business can set their own price to cover the cost. In some cases, minimum transaction is necessary. However, you will know if the business charge you out just because of greediness. Reasonable fee, Yes, greedy charge NO. Surprised someone would bleed dry because of reasonable EFTPOS fee. 100 reasonable EFTPOS fees = $20 (hardly a good dinner for one), and I do not use that many in a month. I will pay reasonable cost for the convenience (hint: compare this with $2.00 ATM fee).

  • I have been working from home for 2 weeks, approx every other day i have gone to my local cafe and bought a coffee and sometimes a danish with a max spend of $7. I went in this morning and ordered a coffee $4 and was asked if i had cash, i said no i don’t carry cash and she said it’s a min $10 spend. I explained i have been coming in here for 2 weeks etc and she gave a dirty look, said ok and mumbled to me when my coffee was ready!
    there are not any signs up saying any min spend and the service was poor! [email protected]!

  • Anyone charging the customer is just plain stingy. I have no doubt that every business will claim their incurred bank fees when reporting to the ATO, which means they’re slugging customers and double dipping.
    Decline making the purchase if they do not waive the fee; they process the transaction without the minimum charge EFTPOS fee over losing the sale.

    • You do realise that when you process the claim with the ATO, you don’t get the full amount back. You get a reduction in your taxable income, which then flows on to paying slightly less tax.

      With simple numbers it would look like this for a business:
      Sales turnover: $10,000
      Expenses: $8,000
      Taxable income: $2,000
      Fees incurred (that are being claimed/deducted): $100
      If you are being taxed at 20% of income, without the fee claiming, it would be:
      20% of $2,000 = $400
      So with no claim you pay $400 in tax.
      With the claim of your incurred fees ($100), this then happens:
      Taxable income, minus claim: $2,000 – $100 = $1,900
      New taxable income: $1,900
      Now, at 20% of income, the tax you pay is:
      20% of $1,900 = $380
      So with the claim you pay $380 in tax

      This is a simplified version, but you see that you do not get back the $100 your business pays in fees, but a smaller percentage of that ($20).

      This works the same way for all tax deductions, whether business, personal, or otherwise. If you have qualms with what I’m saying, feel free to call up the ATO (13 28 65, we are very friendly), or talk to your local accountant.

      I do hope you aren’t going around spreading that sort of rage and misinformation, as it not only make the environment unpleasant for those around you, but makes yourself look ignorant, as anyone who does their own taxes understands this quite well.

      For those of you who say businesses should increase their prices to accommodate fees, the fees ARE being accounted for, just in an open way rather than hiding it in the price of the item itself. Imagine the rage that would ensue if all of your local prices increased by 30 cents, and were told that this was to accommodate the people that were using cards (“Why do I need to pay more, so someone else can use their card! I’m paying with cash!”).

      Those of you who argue that woolies/coles don’t charge a surcharge… well here’s something I stumbled across ( The gist of it, is that they pay less fees, if much at all because they directly negotiate with banks, and also own their own machines so don’t pay rental costs at all. I don’t think anyone should expect a mom-pop store to compete with an ASX listed business that has billions of dollars worth of buying power and influence.

      I don’t understand the intense amount of rage over this, especially directed towards small business. I get charge $7-8 when I’m buying plane tickets, and that’s by large corporations. When I go to my local store I don’t have any issues with a surcharge when I’m buying something with card, I’d rather be charged 20 cents for the convenience of being able to use my card when I don’t have cash on me, rather than no cards accepted at all.

      Seriously, you’re disproportionately upset that you’re paying for a service that costs the business money. How much are you being charged, what 20c? 50c? $1? If you earn say $17.29/hr (minimum wage), that’s less than 3.5 minutes of your time. I could take a shit at a minimum wage workplace and make more than the upper $1 fee I might get charged.

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