Should you have a minimum spend on cards?
Based on what we know about consumers, the real question should rather be: is it a good idea to enforce a minimum spend on card transactions?
Australians have got so used to card payments that merchants who do enforce minimum spends or surcharges are often perceived as archaic.
In fact, the whole logic of card transactions being an extra cost to the business does not hold up. While the average cost of accepting cards is typically 1%-2%, the Reserve Bank estimates that the cost of accepting cash is about 2% of the transaction value.
The cost of cash is higher due to the time required to manage it, cash discrepancies, banking, security etc. It simply does not make sense from a cost recovery stance to add a minimum spend or surcharge on card transactions while leaving cash payments free.
Secondly, consumers expect a certain level of service and are more likely to pay for goods when they get to choose their payment method freely and without any obstacles. Rather than confronting the business with minimum spends, people tend to just take their business elsewhere when it’s easy to do so.