Is there a minimum spend on different card machines?

Since contactless card payments were introduced in the UK in 2007, their usage has continued to increase. And, since 2017, card payments have been the favoured form of transaction for consumers with cash slowly being used less and less.

Indeed, as the UK creeps towards a cashless society and ATMs are dying out, contactless card payments are becoming the norm. Given the ease at which an individual can purchase physical goods with either their bank or credit card or their smartphone or watch, it’s no surprise that contactless payments are so popular.

Additionally, the COVID-19 pandemic further increased the use of contactless payments as the amount of physical currency being passed between people reduced dramatically.

As contactless payments have increased, many consumers may also have noticed the increase in minimum charges in smaller businesses, as they combat fees for taking card payments. But, can businesses demand a minimum fee and is there a minimum spend on different card readers? Find out below.

Minimum spend explained

Contactless Card Machine

Companies that use a card machine to serve their customers are usually charged between 1 and 3% per transaction (possibly more based on their provider). For smaller businesses – like newsagents or cafes – there is often a high number of low-priced transactions that could, over time, cost the business money.

As such, a lot of these businesses set a minimum card spend to ensure they’re not left out of pocket every time a customer wants to pay for one or two items with their card.

In the UK, there is no law against setting a minimum card payment, which is why you may have seen a lot of small businesses incorporate this. The minimum payment is incorporated to cover overhead costs related to POS systems, cash handling charges and other general expenses.

While there is no rule against setting a minimum charge for customers paying by card, card networks like Mastercard and Visa have rules that state any merchants accepting their cards cannot set a maximum or minimum limit.

Visa states: “A merchant must not establish a minimum or maximum transaction amount as a condition for honouring a Visa card or Visa Electron card.”

Mastercard states: “A merchant must not require, or indicate that it requires, a minimum or maximum transaction amount to accept a valid and properly presented Mastercard or Maestro card.”

Are minimum charges negative?

While the above may make sense, setting a minimum charge to avoid paying processing fees isn’t exactly logical because fees vary from provider to provider and possibly even machines.

Many fees are taken as a percentage of the transaction, so the business is being charged anyway, so setting a minimum charge won’t make much difference.

Plus, there is a downside to limiting your customers. Should a customer not be able to purchase a product – a drink, for example – because they can’t reach the minimum charge, it’s a sale the business is losing, and potentially a customer long-term. Is it worth accepting a smaller card payment and paying the transactional fee to ensure the customer returns? For smaller businesses that sit in the heart of a community – yes.

Is there a minimum spend on different card machines?

Minimum spend on different card machines

While different providers will charge varying fees for each transaction, there is no set minimum charge on any card reader or machine in the UK.

This means that a small merchant, like a cafe, will not be charged the same by their provider for a £1.29 sale as they would a £4.60 sale, thus eradicating the need to set customers a minimum charge to use their card or smart device. The fees they agreed to when signing up for the card machine service will determine how much they’re charged per transaction.

While there is no minimum charge, there is a maximum in some cases. If a customer wishes to pay contactless with their credit or debit card, there is a limit of £100. However, when paying with their smart device – Apple Pay, Samsung Pay or Google Pay – the customer can exceed this £100 limit.

Final Words

If you’re a business that feels they’re paying too much for card transactions, consider switching to a cheaper, better service like Handepay.

Switch to Handepay today and start saving yourself some money. Our card machines are the best in the business, with flexible contract lengths – including one-month rolling – and no fees for PCI DSS compliance or non-compliance. We have countertop card machines, portable card machines and high-speed models, like the Saturn Android Smart Terminal. Don’t waste any more time or money; switch to Handepay today. Call us at 0800 377 7382 to find out how.

Financial disclaimer:

Terminal hire contracts are provided by Merchant Rentals Limited, who is authorised and regulated in the UK by the Financial Conduct Authority (FCA) for Consumer Hire under FRN 720500. Terminal hire can be for consumer hire and non-regulated hire contracts. Please check your contract carefully for details. Regulation of all consumer hire fall under the control of the FCA.

Handepay Ltd is authorised and regulated by the FCA for Consumer Credit under FRN 673564. Handepay is a credit broker for consumer hire not a lender.

Handepay acts as an introducer of card acquiring services on behalf of EVO Payments UK, the card acquiring service provider. EVO Payments UK is the trading name of EVO Payments UK Ltd, a payment institution that is authorised and regulated by the Financial Conduct Authority (FRN number 959332).

Existing Cards Businesses- The one-month rolling terminal hire contract from Merchant Rentals is only available to businesses that are switching from their current acquirer to EVO Payments UK arranged through Handepay.

New to Cards Businesses- The 12-month terminal hire contract from Merchant Rentals is only available to businesses that are new to card payments and wish to receive acquiring services from EVO Payments UK, arranged through Handepay.

The Next Day Banking Settlement service provided by EVO Payments UK incurs an additional fee of £4 a month on top of your acquiring service charges and fees. Provided your card machine performs a reconciliation before 12am (midnight), you’ll receive settlement of funds the next banking day.

Editorial disclaimer:

The information we provide does not constitute financial advice and might not apply to your business. Always carry out research into your business’ needs when choosing a new merchant services provider.

Sometimes, we link to other third-party websites to provide you with additional information. At the time of publication, we consider the information accurate, however, we do not have control over their content and are not responsible if any information on these websites change.

The products we display on our website are for illustrative purposes only - if your business requires additional facilities, you may receive a different model than advertised.

All of the information contained on this website, including fees, services and functionality, are correct at time of publishing. E&OE.