Credit cards may be convenient and beneficial to your customers, but for you it's a different story. Their costs are increasing, and it has become one of your main irritants. From the beginning, we fight for you.
For years, we have been hitting governments and the credit card industry hard to hear us. What we ask for you? Fairness and transparency in payment processing.
We scored points by winning several big wins:
- Put in place a code of conduct that gives you more power with payment processors.
- The preservation of the low-cost Interac debit system in Canada.
- A reduction of your fees on Visa and Mastercard services.
- A reduction in Mastercard rates exclusive to CFIB members.
- The possibility (to come) to charge additional fees for privilege cards.
But not everything is won yet! We will not let up until we reach our goals.
It took us several years to convince Visa and Mastercard to reduce their interchange rates for credit card acceptance for the first time ever. The reduced rates came into effect in April 2015. The average rate will also be frozen over the next five years.
- Savings on Visa Cards
- Regular (Classic, Gold, Platinum): 7.8%
- Infinite: 7.5%
- Infinite Privilege: 7.6%
- Savings on Mastercard cards
- Regular (base cards): 6.3%
- World: 11.5%
- World Elite: 5.8%
Note: These rates are imposed on the majority of SMEs for electronic transactions, at the counter by chip card or magnetic stripe. Mastercard has announced a reduced rate category for 24 types of independent businesses, including restaurants and popular stores.
We played a vital role in this progress. Faced with our pressures, the federal government, the credit card companies, and the banks finally gave way. But that can not be done without the support of small business owners across the country.
In concrete terms, what this means for SME managers is that they can forget the regular fee increases and the exorbitant fees associated with the privilege cards.
We also have an agreement with Mastercard to give our members even lower rates !
Code of conduct
It is largely because of our work that the Code of Conduct for the Canadian Credit and Debit Card Industry came into being. Introduced in 2010 by the Canadian government, the Code has preserved the country's low-cost debit system and given merchants some leverage with the credit card industry - a first. Improvements were made in 2015, including:
- the imposition of limits on the automatic renewal of contracts;
- mobile and contactless payment processing coverage, and
- the assurance that small traders can take advantage of reduced rates.
The effectiveness of the Code has been tested several times, and each time the results have been conclusive. CFIB and its members have used the Code to resolve related disputes:
- cancellation penalties due to changes to service contracts ,
- the use of debit cards for online shopping, and
- disclosing important information on the fees charged to merchants in contracts and statements.
We are working closely with the government and various organizations such as the Financial Consumer Agency of Canada (FCAC) to ensure that the primary purpose of the Code - the protection of consumers and merchants - is achieved.
In June 2017, Visa and Mastercard announced that merchants would be able to charge some additional fees for credit card transactions by the end of 2018 (date to be confirmed). This is the result of many years of effort on our part to convince the industry to allow you to offset rising costs.
Not all details are available yet, but we hope you can:
- charge fees up to 2.5%, or the cost of accepting the card,
- apply these fees on Visa or Mastercard, or just on the higher cost privilege cards.
If you decide to charge an extra charge, you must notify:
- your payment processing service provider, and
- your customers, at the point of sale and on receipts.
Most merchants do not want to impose credit card surcharges for fear of losing sales or customers. But be aware that this tactic is important because it allows them to fight back, individually and collectively, if the industry ever tries to raise costs again. In some sectors (such as business-to-business), it may also be useful to charge extra fees when a large purchase is made to a card.
You can make the most of our fight for you:
- Take advantage of reduced Mastercard interchange fees offered exclusively to CFIB members.
- Take full advantage of Chase's preferred rates and exclusive rates .
- Encourage your customers to use their debit card instead of their credit card with free FCEI- Interac promotional items !
We're here for you
While the Code of Conduct gives you more power with payment processors, it does not guarantee that you will be treated well all the time.
CFIB advisers have valuable resources if you have a problem with credit cards, whether for:
- Choose a payment processing service.
- Know your rights and responsibilities as a trader.
- Know how to reduce your costs with Interac.