A and C, in principle I am with you however I would guess that the company involved simply have a charge of 50p (seems high) for use of a debit card irrespective of the value of the transaction. The fact your transaction was of 'low value' is a red herring. It would be reasonable to expect cash for low value transactions.
In a former life the cost and inconvenience of taking cards for 'pennies' resulted in me introducing a minimum card transaction value, I think this is common practice.
Never ceased to amaze how many would pay it without complaint.
BB