There is another layer involved, though. Visa and MC don’t process payments. Cardholders don’t deal directly with them, at all. They are actually fairly small companies that manage the brand and “token” of the cards and systems. The cards are issued by banks and other financial institutions under the Visa/MC umbrella, and banks also process the payments as a service for their clients. There is not 100% congruence between issuers and service providers.
In other words, you don’t really have a Visa card - you have a Visa brand card issued by your bank, or a card-issuing bankazoid like Credit One.
Every issuer and every payment processor has their own rules, limits and restrictions, which is why thousands of competing services provide both. I can’t say there are no service providers who allow merchant clients to restrict purchases, or the reverse, but I do know from my time working with BofA/Visa and with many small business clients that the processors frown on any purchasing limits - if you want them to process your payments, you do it by their rules, just as you use a Visa[-brand credit card] according to Wells Fargo’s rules, not necessarily Visa’s itself.
I have friends and associates who have spent years battling with merchant service providers because they are in a niche (used bookstore, for example) where it is to their advantage to take credit cards but purchases are often small and the fees eat up a large part of their profit. Trying to refuse card purchases under $10 brings their processor down on them, and they don’t have the leverage to change to any provider.
Things have changed a lot in the last decade, but there is still a spectrum of such merchants for whom taking cards is a sharp two-edged sword.
Are you absolutely sure this is still true? I’ve accepted credit cards for awhile, and I’ve only had to deal with Visa and Mastercard’s merchant agreements, and both Visa and Mastercard allow minimum purchases of up to $10 to be required in the US (not internationally, though. Their general rules are no minimums.) I don’t recall any sort of separate agreement with the payment processor that disallows this.
Regardless, even when it was frowned up by the merchant agreement, every ma & pop store in my neighborhood had $5 or $10 credit card minimums, and nobody really seemed to care or police it. Kinda annoyed the crap out of me.
This must vary a lot state by state because I live in NY State and have been using a debit/credit/ATM card for 20+ years and I have never, ***ever ***seen a debit card fee less than $1. And that was a decade ago, today I never see any less than $2.50 (use one at a strip club ATM and they’ll charge you $25!!) When you pay with a debit card at a store it’s essentially the same as using it at an ATM that isn’t at a branch of your bank. Just always choose credit instead of debit. The only places (again here in NY) that charge more for credit is fuel at gas stations.
The rule as I heard it (in California) was that a surcharge for using a credit card was illegal, but a cash discount was legal. Effectively, they’re the same thing except that the higher price must be what’s listed.
I’m curious whether this was codified in law, or just a breach of the merchant agreement. But, yes, that’s how I remember it, too, before last year (though only in regards to the merchant agreement.)
As for debit card fees, that must vary by location. I don’t ever remember being charged extra for using my debit card for a non-cash withdrawal.
So whether or not they amended their rules, federal law in the United States would have prevented them from enforcing a ban on minimum purchases of less than $10.
So, basically, the merchant is, by law, allowed to refuse credit card transaction for under $10 (with some restrictions). Which is quite the opposite of what was being claimed in this thread before.
Some of us rarely carry cash on us. I rarely buy fast food with csh. It’s usually debit or credit, even on the dollar menu. If I have cash on me, it’s usually big bills (like hundreds) that I don’t feel like breaking for a $2 transaction. (And some places won’t even accept, anyway.) I don’t find this unusual. Lots of people I know don’t deal with cash if they can avoid it.
…what an odd thing to say. I almost never have actual cash on me anymore and almost every purchase I make is either over the internet or with my eft-pos/debit card. Even parking meters take debit card now.
If you want to use a debit card for such a small purchase, merchants should be allowed to charge a reasonable fee for your “convenience” of being relieved of the incredible burden of carrying a few 1, 5, 10 or 20 dollar bills. I think it’s reasonable to have a $10 minimum for debit and credit card use.