Skip to main content

Credit card surcharge change comes into effect for Canadian businesses

Share

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 one per cent to as much as three per cent 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.

"This has been a long time coming," Canadian Federation of Independent Business (CFIB) president Dan Kelly told CTV's Your Morning on Thursday.

"Canadians pay among the highest credit card processing fees in the world but most don't even know that they're paying them now. These costs are embedded in the costs of everything that we buy because they're through merchants."

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.

Forty per cent of small businesses surveyed said they are not sure if they would add the surcharge, while 15 per cent 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.

Meanwhile, research last year from the Bank of Canada found consumers still pay far more than they get in credit card rewards points because of the fees embedded in retail prices, with low-income consumers paying a disproportionately high net cost.

With files from CTVNews.ca Writer Daniel Otis and The Canadian Press

CTVNews.ca Top Stories

N.B. man wins $64 million from Lotto 6/49

A New Brunswicker will go to bed Thursday night much richer than he was Wednesday after collecting on a winning lottery ticket he let sit on his bedroom dresser for nearly a year.

Do these exercises for core strength if you can't stomach doing planks

Planks are one of the most effective exercises for strengthening your midsection, as they target all of your major core muscles: the transverse abdominis, rectus abdominis, external obliques and internal obliques. Yet despite the popularity of various 10-minute plank challenges, planking is actually one of the most dreaded core exercises, according to many fitness experts.

Local Spotlight

N.B. man wins $64 million from Lotto 6/49

A New Brunswicker will go to bed Thursday night much richer than he was Wednesday after collecting on a winning lottery ticket he let sit on his bedroom dresser for nearly a year.

Record-setting pop tab collection for Ontario boy

It started small with a little pop tab collection to simply raise some money for charity and help someone — but it didn’t take long for word to get out that 10-year-old Jace Weber from Mildmay, Ont. was quickly building up a large supply of aluminum pop tabs.

Stay Connected