In Malaysia, it is quite common that we come across merchants setting minimum charges for card payments, or even impose a surcharge. Under black letter law, it is legal for them to do so?
Recently, a journalist from Says.com reached out to Bank Negara Malaysia (BNM) to seek clarification and this is what BNM replied:
“Merchants are prohibited from imposing a minimum purchase amount for goods bought using payment cards.”
This above restriction is also stipulated in the scheme rules issued by Mastercard and Visa.
Under Section 18.104.22.168 of the ‘Visa Core Rules and Visa Product and Service Rules’, it states that:
“a Merchant must not establish a minimum or maximum transaction amount as a condition for honouring a Visa Card or Visa Electron Card.”
Under Section 5.11.3 of the ‘Mastercard Rules’, it points out that:
“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.”
Meanwhile, the Association of Banks in Malaysia (ABM) had in earlier press release stated that imposing minimum spending on card payment is not allowed, and that it will carry out random checks to ensure merchants do not do so.
Why some merchants impose minimum spending amount or surcharge for card payment?
In the Payment Card Reform Framework issued by Bank Negara Malaysia (BNM), it has been stated that merchants have to pay a merchant discount rate, comprises of the interchange fee, processing fees, and other fees imposed by an operator and acquirer for facilitating a card transaction. In other words, this simply means that merchants face additional costs for accepting a card payment, and fees are imposed every time a card transaction occurs.
Therefore, some merchants who do not want to bear these costs would try to pass off the fees to consumers through imposing a surcharge, or setting a minimum payment amount before accepting card payment. However, both of these practices are forbidden by law.
So, as a consumer, what can you do about it?
- Firstly, tell the merchant owner that he/she is not supposed to do so and request politely that he/she shall change their payment policies to comply with the law.
- If the merchant refuses to comply, you may report the merchant directly to the financial institution that processes the card payment on behalf of the merchant. P/s: the merchant’s bank or financial institution’s logo can be spotted at the card terminal or in the receipt.
- You may also report to Bank Negara Malaysia by calling 1300-88-5465 or sending an email to firstname.lastname@example.org.
- Alternatively, you can raise the matter to ABM by calling 1-300-88-9980, or submit your complaint online via eABMConnect.