Debit card minimum fee

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d7e7r7

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Hi guys,

Just a quick question:

Many bars, clubs and some shops refuse debit cards as a means of payment if the purchase is below a certain amount (R50 seems to be the most common).
Is there anything in the new consumer act or any other act that gives consumers the power to go through with a transaction at a venue that has debit card facilities but refuses a transaction because it is lower than an amount they specify?
 
According to Visa and Mastercard's (Maestro) terms and conditions, vendors may not set a minimum or maximum transaction amount, nor may they charge any extra fees to a customer using a credit or debit card, nor may they may they ask a customer for identification. If they do any of these they are in violation of their merchant account terms and conditions and risk having their merchant accounts closed. You might want to point this out to the vendor. I've done this several times and it's amazing how their attitude changes when they realise that you know what you're talking about.

Also, a vendor may not refuse to accept a debit or credit card as payment if they have the facility.
 
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I've never encountered this. Besides, are you talking about debit cards like maestro and visa electron because then there is no good reason for them doing that as the fee is for the customer's account not the merchants in those cases, however traditional credit card type cards (even though some might be debit cards since they are debiting money off cheque accounts etc) do attract a merchants fee.
Then there are shops like PC Zone (here in Durban, Pinetown and Ballito) run by a guy who insists on cash only and charges you much much more if you want to pay by card of any type. I can really only think of one reason for that thinking....
 
I've never had my card refused, debit or credit... and I use it often to pay for coffee (R15)....
 
There is no real reason for them to refuse debit cards, as the purchaser pays the costs. With a credit card however the retailer pays the cost and many retailers refuse to accept them for payments under R50 or whatever. Some countries like Germany for example there are very few places where you can use your credit card to pay.
 
The point is that they are not allowed to refuse a debit or credit for any reason if they have the facility.
 
I've been refused at about 3 or 4 places in and around Cape Town...
Any link to an act or terms and conditions I can print out or someone I can complain to?

EDIT: Just checked my debit card to make sure and it there is a Mastercard logo on the bottom right...
 
I've never had issues with people refusing to accept cards, even with tiny purchases (I rarely carry cash with me anymore). The fee merchants pay on card transactions are generally smaller than the cash deposit fees they would pay to the bank anyway, so unless they are using the cash to launder drug money, they shouldn't have a good reason to refuse to accept any card transaction.
 
MoodyEve said:
I've never encountered this. Besides, are you talking about debit cards like maestro and visa electron because then there is no good reason for them doing that as the fee is for the customer's account not the merchants in those cases, however traditional credit card type cards (even though some might be debit cards since they are debiting money off cheque accounts etc) do attract a merchants fee.
Then there are shops like PC Zone (here in Durban, Pinetown and Ballito) run by a guy who insists on cash only and charges you much much more if you want to pay by card of any type. I can really only think of one reason for that thinking....
Click to expand...

Wyzak said:
There is no real reason for them to refuse debit cards, as the purchaser pays the costs. With a credit card however the retailer pays the cost and many retailers refuse to accept them for payments under R50 or whatever. Some countries like Germany for example there are very few places where you can use your credit card to pay.
Click to expand...

Merchants are charged commission on both debit and credit cards. Debit cards is lower. There are other reasons though - for example, a debit card is an online card, every purchase you make requires a dial-up to verify details. If this dial-up occurs on a good old 56k modem, then the merchant is getting charged a nice telkom fee and a bank commission fee all for the nice R2 profit he just made on the coffee you just bought.
 
Quite frankly, I feel nothing for the merchant. They have chosen to accept debit and credit cards knowing what the transaction charges are and knowing what the terms and conditions are for merchants. If they don't like the transaction fees then they can stop taking debit and credit cards.
 
juanvh said:
I've never had issues with people refusing to accept cards, even with tiny purchases (I rarely carry cash with me anymore). The fee merchants pay on card transactions are generally smaller than the cash deposit fees they would pay to the bank anyway, so unless they are using the cash to launder drug money, they shouldn't have a good reason to refuse to accept any card transaction.
Click to expand...

I also rarely get slapped with this "minimum purchase or pay cash" but recently it seems to be happening more and more...
 
deweyzeph said:
According to Visa and Mastercard's (Maestro) terms and conditions, vendors may not set a minimum or maximum transaction amount, nor may they charge any extra fees to a customer using a credit or debit card, nor may they may they ask a customer for identification. If they do any of these they are in violation of their merchant account terms and conditions and risk having their merchant accounts closed. You might want to point this out to the vendor. I've done this several times and it's amazing how their attitude changes when they realise that you know what you're talking about.

Also, a vendor may not refuse to accept a debit or credit card as payment if they have the facility.
Click to expand...

Yeah, don't put up with their ****. I have complained to Mastercard before and they phoned the merchant and gave them a warning :D
 
deweyzeph said:
According to Visa and Mastercard's (Maestro) terms and conditions, vendors may not set a minimum or maximum transaction amount, nor may they charge any extra fees to a customer using a credit or debit card, nor may they may they ask a customer for identification. If they do any of these they are in violation of their merchant account terms and conditions and risk having their merchant accounts closed. You might want to point this out to the vendor. I've done this several times and it's amazing how their attitude changes when they realise that you know what you're talking about.

Also, a vendor may not refuse to accept a debit or credit card as payment if they have the facility.
Click to expand...

We have a R50 limit in our shop. The way it works is there is a minimum sale of R50 which is waived for cash payments. I was told by FNB when we installed the speedpoint this is the way to do it.
We get charged a fixed fee plus 5% plus VAT fee on all cards mastercard or visa. The reasoning is we pay telkom for each phone call to get authorisation then if your R20 sale is the only card purchase for the day then it is also another phone call to cash up. Then you have to file and keep the slips in case of queries. When this is explained to customers they say they understand.
 
Is this it?
http://www.mastercard.com/global/merchant/_assets/docs/MasterCardRules.pdf
Page 5-16
5.8 Card Acceptance Requirements
An Acquirer must ensure that each of its Merchants complies with the Card
acceptance requirements set forth in this Rule 5.8 and in section 2.1 of the
Chargeback Guide.
5.8.1 Honor All Cards
A Merchant must honor all valid Cards without discrimination when properly
presented for payment. A Merchant must maintain a policy that does not
discriminate among customers seeking to make purchases with a Card. A
Merchant that does not deal with the public at large (for example, a private
club) is considered to comply with this rule if it honors all valid and properly
presented Cards of Cardholders that have purchasing privileges with the
Merchant.
Click to expand...

Doesn't say anything about refusing payment based on minimum fee though :confused:
 
Ianf1 said:
We have a R50 limit in our shop. The way it works is there is a minimum sale of R50 which is waived for cash payments. I was told by FNB when we installed the speedpoint this is the way to do it.
We get charged a fixed fee plus 5% plus VAT fee on all cards mastercard or visa. The reasoning is we pay telkom for each phone call to get authorisation then if your R20 sale is the only card purchase for the day then it is also another phone call to cash up. Then you have to file and keep the slips in case of queries. When this is explained to customers they say they understand.
Click to expand...
Family of mine also got a SpeedPoint earlier this year for a B&B and I can't remember the details but you do loose out as a business if you ring up small amounts on a debit or credit card. Luckily in a B&B you never have a sale of under R150-00.
 
d7e7r7 said:
Doesn't say anything about refusing payment based on minimum fee though :confused:
Click to expand...
It sure does
5.11.3 Minimum/Maximum Transaction Amount Prohibited
A Merchant must not require, or indicate that it requires, a minimum or maximum Transaction amount to accept a valid and properly presented Card.
Click to expand...
 
Weird. Never had such an issue either though I will admit that I use it only for purchases above ~R250 as paying less would cost me more than drawing the cash in fees.
 
Ianf1 said:
We have a R50 limit in our shop. The way it works is there is a minimum sale of R50 which is waived for cash payments. I was told by FNB when we installed the speedpoint this is the way to do it.
We get charged a fixed fee plus 5% plus VAT fee on all cards mastercard or visa. The reasoning is we pay telkom for each phone call to get authorisation then if your R20 sale is the only card purchase for the day then it is also another phone call to cash up. Then you have to file and keep the slips in case of queries. When this is explained to customers they say they understand.
Click to expand...

If someone complains to Visa or Mastercard you risk losing your merchant account. What you are doing is wrong.
 
deweyzeph said:
If someone complains to Visa or Mastercard you risk losing your merchant account. What you are doing is wrong.
Click to expand...

Price discrimination on card purchases is also wrong, but stores such as PC Zone get away with it by rephrasing it as a "cash discount". I don't see the difference in this scenario, the store is imposing a minimum value for all sales, and waiving it for cash.

Taking it to another level, some stores offer (or used to) 6 months interest free. BUT the cost of that credit was actually built into the price of the goods, disincentivising people using cash.

The small business could build the costs of having an acquiring device into his base prices, but that'd make him less competitive. He could also offer the "cash discount"...?
 
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