In Canada, stores and retailers will now be able to apply credit card fees back to the consumer.
When you pay with a credit card at a store, you may be paying more than you would if you were paying in a different manner. Most of us are aware of the minor credit card fee here and there, but in Canada, the surcharges may be getting worse. In fact, Amazon in the UK, will no longer accept Visa because of this type of surcharge.
As we’ve become an almost completely cashless society, credit cards have cashed in on these new habits and now want to charge us for using them. According to Daily Hive, Canadian businesses will now be able to flip the credit card fee they incur onto the consumer.
Fair? Probably not. But, it’s the way it is right now in some places of the world. The credit card fee can range from 2.87% to 4.35%. And if you’re a small business, this can start to eat up a lot of your profit.
This is why the Canadian Federation of Independent Business is now allowing merchants to decide if they want to transfer their side of the credit card fee onto you. This is not unlike what is happening in the US with larger companies as well.
Currently, Walmart is involved in a bitter battle with Visa and Mastercard to push for legislation that would help reduce the credit card fee they see. Instead of this fight in Canada, Canadians are simply flipping that fee onto the consumer.
Walmart is only among 1,200 major retailers who are pushing Mastercard and Visa to curb their credit card fee. Last year, these “swipe fees” went up 25% and cost retailers a collective $137.8 B. Cash is looking better and better these days.
Retailers are saying that Visa and Mastercard have a monopoly on credit card transactions and are able to charge a credit card fee because they well, can simply get away with it. There is no other choice.
Recently, Tell Me Best reported that Visa and Mastercard, the two embroiled giants, are actually causing inflation to get worse. Based on that billion-dollar amount mentioned above, one can see how that is more than likely true.
Before you start thinking, well, I’ll just use my debit card because that money is already mine, the credit card fee applies to those as well. It’s just basically the fee that costs the retailer to run the card through the process to get your money—whether it’s borrowed or owned, it doesn’t matter.
But in Canada, the government decided to hand the power back to the retailer. However, this is a risky move because consumers could decide not to shop at the store that decides to give them the extra surcharge. Taking their business somewhere else could be detrimental as well.
Although the credit card swipe fee does make sense, most people agree they have gotten out of hand. And now, when you go to take money out of an ATM, you’ll probably get charged another swipe fee. (unless you go into the bank). But who does that anymore when online banking can be so much easier?
Unfortunately, just another credit card fee is something we’re comfortable paying if it means more convenience for us.