Businesses could add credit card fees as restrictions lift
The Canadian Press
Published Thursday, October 6, 2022 5:57AM EDT
Last Updated Thursday, October 6, 2022 5:57AM EDT
Canadians may see a jump in the number of businesses applying credit card use surcharges as restrictions on the practice lift today.
Businesses secured the right to add a surcharge, which they must clearly disclose, to credit card transactions as part of a class action lawsuit against MasterCard, Visa and Canadian banks.
A survey by the Canadian Federation of Independent Business found that close to one in five businesses are considering adding a surcharge to offset the merchant fees they pay for credit card processing. The CFIB says these fees can eat up to 2.5 per cent of a business's total sales.
But the group says consumer-facing businesses are less likely to pass on costs over concerns they will lose customers, so credit card surcharges will be more common among businesses that sell to other businesses.
Research by the Bank of Canada last year found that consumers already pay extra for the privilege of credit card use, as most merchants pass on the cost of credit card processing in their retail pricing.
The working paper found that consumers likely pay anywhere from $17 to $52 a month in credit card processing costs, passed along in the form of increased prices.
This report by The Canadian Press was first published Oct. 6, 2022.