Credit card surcharge change comes into effect for Canadian businesses
October 06, 2022
Canadian businesses are now able to pass on a new credit card surcharge to their customers starting today. The new rule allows merchants to charge consumers what are known as interchange or swipe fees, or the money credit card companies, banks and payment processors collect from merchants with every transaction.
Canadian businesses are able to pass on a new credit card surcharge to their customers starting today, although it remains to be seen how many merchants decide to adopt the new fee.
The new rule allows merchants to charge consumers what are known as interchange or swipe fees, or the money credit card companies, banks and payment processors collect from merchants with every transaction.
Fees can range from around 1% to as much as 3% for cards.
It comes following a multimillion-dollar class-action settlement involving Visa and Mastercard, which allowed Canadian businesses to claim up to $5,000 in credit card fee rebates.
Nearly 1-in-5 merchants considering credit card surcharge ahead of new rules: Canadian businesses can charge credit card fees starting Oct. 6
"This has been a long time coming," Canadian Federation of Independent Business (CFIB) president Dan Kelly told CTV''s Your Morning on Thursday.
Businesses that want to add a fee for credit cards must display signage, indicating they have a surcharge, and show it explicitly on receipts. The surcharge option will not be available in Quebec due to the province''s consumer protection laws.
A report from the CFIB this week found 19 per cent of small businesses are considering the surcharge to offset processing fees, while 26 per cent say they will use it if their competitors or suppliers do.
However, the survey found businesses that often sell to other businesses are most likely to add on the surcharge, while those that serve consumers were less likely to out of fear of losing business.
40% of small businesses surveyed said they are not sure if they would add the surcharge, while 15% don''t intend to.
Kelly and other retail experts say they do not believe many retailers, particularly consumer-facing businesses, will add on the surcharge due to tight competition and a fear of losing customers.
The Liberal government committed in its last two budgets to reduce these fees but is still working on consultations.