Mastercard urges Australian businesses to lift minimum card spend limits
Global payments giant Mastercard has highlighted the business opportunity for Australian retailers if they were to remove minimum card transaction limits.
The company says Australian businesses could be losing up to 56% of customers due to minimum spends or not accepting card as a payment method.
Its study revealed that four out of five Australians agreed that they resent restrictions such as minimum spends and charges when making payments by card.
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To put this to the test and prove that minimum spends can harm revenue, Mastercard conducted the ‘Limit Test’ at the University of New South Wales. The experiment involved setting up two identical coffee carts, with the same prices, menu and coffee, with one cart carrying a $10 minimum card spend and the other a $0 minimum spend.
The $10 minimum spend cart received poor sales totaling $21. In contrast, the $0 minimum spend cart took sales of $240, further highlighting how important it is for businesses owners to rethink their payment procedures.
Matt Barr, Senior Vice President, Digital and New Payment Flows at Mastercard, commented: “It’s time for businesses to seriously consider adjusting their policies, as more and more consumers are voting with their feet and taking their custom elsewhere in response to payment restrictions.
“Our surveys continue to reveal that Australian consumers are choosing to pay by card and are resenting any restrictions on this. If businesses do not adjust their policies soon, there is a very real chance they are going to be left behind, if they aren’t being already.”
Mastercard is currently spearheading a Zero Minimum campaign which urges businesses to offer as flexible payment options as possible to consumers.
Timeline: India takes unicorn leap with six in five days
We chart an historic week in India’s tech industry, where in just five days, between 5-9 April 2021, the country achieved six new unicorns, bringing India’s total to 10 in 2021 to date, an immense unicorn leap from just seven in 2020 and six in 2019.
April 5: Meesho
India’s first social commerce unicorn, Meesho raised US$300m from SoftBank, Facebook and Shunwei Capital, giving the Bangalore-based startup a US$2.1bn valuation, a threefold jump from its previous funding round in 2019. Founded in 2015 by two IIT-Delhi graduates, Meesho connects producers and resellers, helping small businesses sell through social media. It has 45m customers and has enabled 13m entrepreneurs to start their online businesses with no investment.
April 6: CRED
Founded just over two years ago, Bangalore-based credit card repayment app CRED raised US$215m from Falcon Edge Capital and Coatue, nearly trebling its valuation to US$2.2bn from its January US$80m round. Allowing customers to pay off their credit card debt while earning CRED coins which they cash in for rewards, CRED has grown rapidly during COVID-19, doubling its customer base to nearly 6 million in a year.
April 7: API Holdings / Groww
The first epharmacy startup to gain unicorn status, PharmEasy (API Holdings), which has digitised 60,000 brick and mortar pharmacies and 400 doctors across India, raised US$350m in a round led by Prosus Ventures. Founded by four former Flipkart employees as a way of making investing simple, investment platform Groww became India’s second-youngest fintech unicorn, raising US$83m in Series D funding led by Tiger Global, quadrupling its previous round in September.
April 8: ShareChat
New Delhi-grown social media startup ShareChat, founded in 2016 by Mohalla Tech raised US$502m from Lightspeed Ventures, Tiger Global, Twitter and Snap taking its raised total over six rounds to US$766m and pushing its valuation to US$2.1bn. The funding will be used to grow its user base and short video platform Moj, which launched in 2020 following TikTok’s ban in India. The regional language startup claims 280m users.
April 9: Gupshup
AI-led conversational message startup joined the unicorn club after raising US$100m from Tiger Global giving it a ten-fold valuation of US$1.4bn. The smart messaging platform, which has seen accelerated growth during the pandemic, was founded in Bangalore in 2005 by serial entrepreneur Beerud Sheth, whose online freelancing platform Elance is now listed. Gupshup’s API enables 100,000+ businesses to build messaging and conversation experiences across 30+ communication channels.