Visa and MasterCard merchant card acceptance policies state that merchants cannot set a minimum for accepting credit cards on a transaction. If you accept the card, you must accept for all transactions. This has not stopped businesses, especially restaurants and quick stop stores from posting signs with $10 minimum charge. The repercussion for merchants can be fines and removal of card acceptance privileges. Additionally there are state laws that address this issue and conflict with the card association regulations.
Why do merchants want to set a minimum fee? The problem is the high cost of credit and debit card processing relative to their profit margins. For example, a typical sale costs the merchant a percentage rate and a per item fee. If 2% plus $.20 per item, that’s the equivalent of 4% fee for accepting a card for payment.
The 2010 Durbin amendment specifically addresses this issue in this section:
- Setting of maximum/minimum transaction thresholds for use of a credit card
It’s important to note that the Durbin Amendment is still a work in progress that will give the Federal Reserve new powers. Not everyone thinks this is a great idea, as we published in the article