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Regina, March 1, 2017 – New research by the Canadian Federation of Independent Business (CFIB) shows that credit card transaction costs for the City of Swift Current increased 17 per cent from 2013-2015, while the City of Saskatoon increased by 14 per cent and the City of Regina increased by 12 per cent over the same time period. Some municipalities pay transaction fees for payments made by residents and businesses for municipal services, permits, licenses, etc.
In contrast, the City of Prince Albert does not accept credit cards for any payments (including property tax, utilities, and fees) apart from at recreational facilities, while the City of Moose Jaw only permits the use of credit cards through a ‘user pay’ third party processor.
According to data gathered through a series of Freedom of Information and Protection of Privacy Act requests, from 2013-2015, the City of Swift Current paid $187,736 cumulatively to process credit card transactions. However, as of fall 2016, the City of Swift Current no longer accepts pre-approved credit card payments. In addition, the City of Saskatoon paid $732,083 cumulatively to process credit card transactions while the City of Regina paid the most in credit card processing fees, $816,187, during the same time period. However, to control their costs, the City of Regina tenders their banking services every four years.
“While municipalities provide residents and local businesses the convenience of using credit cards to pay for services, they also need to be aware of the costs and look for ways to control and reduce those expenses,” said Jennifer Henshaw, CFIB’s Policy Analyst for Saskatchewan and author of the report.
CFIB’s report found the cities of Prince Albert, and Moose Jaw have taken alternative approaches to control the costs of credit card processing fees. The City of Prince Albert does not accept credit cards for any payments (including property tax, utilities and fees) apart from at recreational facilities. And the City of Moose Jaw only allows the use of credit cards through a third party online credit card processor called Plastiq for its two major revenues streams (property taxes and utility bills).
Most entrepreneurs are fully aware of the cost of credit cards and take action to minimize them for their own business. In fact, those rising costs led CFIB to negotiate and offer discounted rates to its 109,000 small business members across Canada. Most recently, CFIB reached an agreement directly with Mastercard, which allows CFIB members to get the same rate as individual merchants with over $3 billion in Mastercard sales. This is an industry first and goes into effect starting April 3rd, 2017.
To ensure all municipalities reduce the costs of credit card transaction fees, CFIB recommends the following:
To arrange an interview, please contact Jennifer Henshaw at (306) 757-0000, 1 888 234-2232 or email [email protected]. You may follow CFIB Saskatchewan on Twitter @cfibsk. See CFIB’s report: Credit Card Transaction Costs in Saskatchewan Municipalities
As Canada's largest association of small- and medium-sized businesses, CFIB is Powered by EntrepreneursTM. Established in 1971, CFIB takes direction from more than 109,000 members (5,250 in Saskatchewan) in every sector nationwide, giving independent business a strong and influential voice at all levels of government and helping to grow the economy.