Credit card usage has shot up, and it’s crushing my bottom line!

Consumers love their credit card reward points, but processing fees for merchants add up quickly! And with more and more people paying for everything with cards, it’s time for these fees to come down, especially as Canadian merchants pay among the highest fees in the world.

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Canada pays some of the highest credit card fees in the world

Consumer spends $100 on a new ski helmet

ski helmet		 Total cost for accepting credit cards

Interchange Fee1
(1.4%)
+ Assessment Fee 2
(0.09%)
+ Payment Processing Fee 2
(0.2%)
+ Other Misc. Fees 3
(0.007%)		 = Merchant pays on average 1.70% or $1.70 on a $100 purchase. After all fees, retailer receives: $98.304
  • Nearly 80% of business owners say that the current credit card processing fees they pay are not sustainable.
  • 81% of small business owners take a hit to their bottom line to cover the costs of accepting credit cards.
  • Small firms say credit card fees associated with in-store sales (49%) and online/e-commerce sales (39%) have increased over the last 3 years.

For 15+ years, CFIB has been leading the charge with government and the credit card industry for fairness for small business and now is the time for further action!

In the Fall Economic Statement, Deputy Prime Minister Chrystia Freeland promised action in the months ahead:

“The government intends to enter into negotiations with payment card networks, financial institutions, acquirers, payment processors, and businesses to lower credit card transaction fees for small businesses…”
– Federal Fall Economic Statement, November 3, 2022

Parliament of Canada (Peace Tower) where small business owners can ask the government to lower credit card fees
  1. Interchange fees are set by credit card companies and are collected on every transaction. Depending on the card type, rates can range between 1 — 2.4%, with an average of 1.4% for Mastercard and Visa.
  2. Rates vary from processor to processor. Rates displayed here are CFIB's member exclusive rates with Chase.
  3. Additional fees can be charged by processors/banks and can therefore fluctuate (e.g., service fees, foreign transaction fees, chargeback fees, etc.).
  4. E-commerce rates are much higher.

Hon. Chrystia Freeland, Deputy Prime Minister,
Stacey Madge, President, Visa Canada,
Sasha Krstic, President, Mastercard Canada

Credit card merchant fees are far too high – everyday, my bottom line takes a significant hit so that I can accept electronic payments. And I’m not alone: nearly 80% of small business owners say that credit card processing fees are not sustainable. It’s unfortunate, but true that Canadian small businesses pay some of the highest credit card rates in the world.

I urge you to help my business by:

  • Lowering merchant fees to no more than 1% of the total sale
  • Ensuring fees for ecommerce are kept low to allow small firms to compete online
  • Protecting low-cost Interac debit and the Code of Conduct
CFIB

The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small and medium-sized businesses with 97,000 members across every industry and region. CFIB is dedicated to increasing business owners’ chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings.