Why merchants set a minimum – and why they’re not good reasons
Rule-breaking aside, why do some merchants still impose limits like a £5 minimum on card payments?
Mainly because of the fees they pay for each transaction. The logic is: the smaller the transaction amount, the higher is the proportion you pay in card fees in relation to what you keep for yourself.
The reality is, this only applies if you pay fixed fees (e.g. 20p per payment) for each transaction. If you pay the same percentage no matter how high the individual transaction amount is, you get to keep the same profit as when a customer pays a large amount in one go.