MasterCard to hike assessment fees for small business by 20% on July 1: CFIB
Published Friday, January 4, 2013 11:29AM EST
Last Updated Friday, January 4, 2013 12:56PM EST
TORONTO -- MasterCard Canada plans to follow Visa's lead and increase transaction fees for small merchants this summer, according to the Canadian Federation of Independent Business.
The CFIB said Friday that the credit card company has disclosed that it plans a 20 per cent increase in its assessment fee to 7.7 basis points on July 1.
President and CEO Dan Kelly said that while the increase is smaller than the one announced earlier by Visa, his organization -- the largest representing Canada's small- and medium-sized businesses -- is still dismayed by the decision.
"CFIB is very disappointed that MasterCard is choosing to increase its fees at a time when small firms are struggling with an uncertain economy," Kelly said in a release.
He added that it was particularly surprising that both major credit card brands are upping their fees just before Canada's Competition Tribunal is expected to rule in its case against the two credit card giants.
"Unfortunately, the only competition between Visa and MasterCard is to see who can raise prices the most for merchants and consumers and deliver the highest fees for Canada's banks," Kelly said.
MasterCard issued an email statement saying it has operated a "seamless and trusted" network for the past 45 years.
"We continuously work to balance the payments network so that all parties pay their fair share," it said.
MasterCard said it will continue to work with merchants and institutions that issue the cards to deliver payment methods "that deliver consumers a valuable purchasing experience."
The CFIB is among those arguing against industry rules that require businesses that accept Visa or MasterCard to treat all types of their cards equally, regardless of the cost of processing payments.
The CFIB, with 109,000 members countrywide, says shopkeepers and others who accept credit and debit cards as payment need the right to be able to refuse high-cost cards or to add limited surcharges.
It also argues Canada's code of conduct needs provisions for new mobile types of payment, such as by cellphone.
Under a settlement reached in the summer, Visa, MasterCard and major banks agreed to pay retailers in the United States at least US$6 billion to settle a long-running lawsuit that alleged the card issuers conspired to fix the fees that stores pay to accept credit cards.
Under that settlement, which settled a dispute going back to 2005, U.S. merchants will also be allowed to charge their customers more if they pay with credit cards.