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Attract more customers with a lower rate
New power important, but likely seldom used
Toronto, June 14, 2017 – The Canadian Federation of Independent Business (CFIB) is 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.
For several years, CFIB 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 provide merchants additional powers to address their 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.
While expecting limited use, CFIB believes the ability to surcharge 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,” noted Kelly.
Latest in series of improvements pushed for by CFIB
CFIB added that much has changed for the better in the credit card industry over the past decade. This includes:
“While more work is needed for small firms in the payments industry, CFIB is pleased to see solid progress in balancing the powers between card brands and banks with merchants and consumers. These actions, including the ability to surcharge, are signs that non-regulatory approaches can work when the payments industry, government and merchants work together,” Kelly concluded.
CFIB is committed to working with the industry and governments on further efforts to reduce the cost of payments and, where permitted by law, ensure that the limited power to surcharge is used carefully by Canadian independent merchants.
To arrange an interview with Dan Kelly, please contact Kiara Morrissey at 416-222-8022, or [email protected].
CFIB is Canada’s largest association of small and medium-sized businesses with 109,000 members across every sector and region.