Credit card purchases: The bill will be higher almost everywhere in Canada

All traders can benefit from this right, except in Quebecbecause of Consumer Protection Act.

The change is possible because of a multi-million dollar class action lawsuit filed by Canadian merchants against Visa and Mastercard. You can claim compensation of up to $5,000 for expenses paid between March 23, 2001 and September 2, 2021. Traders generally pay a “tax” of 1% to 2.5% the invoice amount for each credit card transaction. The regulation now allows them pass this payment on to customers under certain conditions. One of them is to warn your customers at least 30 days before this new policy comes into effect. The vice-president of the Canadian Federation of Independent Business (CFIB) in Quebec, François Vincent, does not believe that this measure will have a positive impact on the prices of the products sold:

“We are coming out of a two-year pandemic with an average debt of $108,000 per company (…) This percentage, transferred to the credit card giants, makes a big difference in the lives of merchants.” – François Vincent, Vice President of CFIB

The grocery store owner can pay nearly $250,000 per year in transaction fees on credit card purchases. In all cases, the cap is capped at 2.4% of the customer’s bill per transaction. Merchants may require this additional payment for credit or debit purchases.

An unpopular choice?

However, in this time of inflation, many retailers have no desire to increase their customers’ bills even further. According to a CFEI survey conducted between September 1 and 8, one in five business owners intend to use this new regulation to offset their losses. However, one in four retailers could move forward if their competitors or suppliers start charging these fees.

The Telus company has already warned its customers that they will have to pay 1.5% additional fee (plus taxes) on your invoice, which will be paid by credit card from October 17th. Customers can avoid this regulation by paying by direct debit or with a prepaid credit card.

The Canadian Federation of Independent Business will take policy steps to ensure its members in Quebec receive the same privileges as entrepreneurs elsewhere in Canada.

Andrea Hunt

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