Some Credit Card Users Might Have to Start Paying Extra Fees
While credit cards are no doubt convenient, some could end up costing shoppers a little more at the register.
The Canadian Federation of Independent Business (CFIB) recently announced that it's "praising announcements from Visa and Mastercard that they will soon allow merchants the power to levy limited surcharges when accepting credit card payments from consumers."
That means that some credit card users might be charged extra if they want to pay merchants with specific cards.
Although this move might displease some consumers, it's not terribly unexpected. For some time now, CFIB has called on the credit card industry to allow merchants to surcharge some or certain types of credit cards (such as premium cards) in order to offset rising costs.
"The ability to add a small surcharge to accept a credit card payment - particularly for higher cost premium credit cards - is an important power to have, but it is not expected to be widely used by smaller merchants," said CFIB president Dan Kelly. "It takes a lot to get a customer into one's store and even more to get them to the register. About the last thing most merchants would want to do is frustrate a consumer at the point of payment," Kelly added.
The CFIB says it expects "limited use" of this privilege, but believes the freedom to charge more will be helpful in guarding against future credit card fee increases, as merchants could take collective action in the face of a large fee hike.
"Very few Canadians know that Interac debit has always allowed surcharging, and this power is used in very limited circumstances - typically by very small merchants selling low-ticket priced items," said Kelly.
The move comes after Visa and MasterCard agreed to settle with merchants following a class-action lawsuit filed in 2011. According to the Canadian Press, the suit alleges that Visa and MasterCard rules forced merchants to accept all their credit cards, including ones that charged retailers high fees.
According to The CP, both credit card companies agreed to pay $19.5 million each and allow Canadian merchants to add surcharge fees on credit card payments.
The changes could take more than a year to materialize.
- New study determines best credit card in Canada
- Major Discount Brand Expanding and Finally Accepting Credit Cards
- Major Bank Forgives Debt of Its Canadian Credit Card Holders
- CIBC offers reduced credit card interest rate for clients in financial hardship
- Canadians taking steps to avoid credit card debt, despite economic pressure