Credit Card Merchant Fee Settlement - Surcharges?

Banking and Saving strategies, maximizing interest rates, budgeting, GICs, HISAs.
Post Reply
Hogwild
Contributor
Contributor
Posts: 393
Joined: 18 Aug 2015 21:46

Credit Card Merchant Fee Settlement - Surcharges?

Post by Hogwild »

Hi friends:


What are the repercussions of this headline? Does this mean that my cards with cashback, points, etc. will now be charged a premium
at some point?

http://www.bnn.ca/stores-may-ask-custom ... t-1.779178

If not, what does it mean?

Modified Subject to reflect content
Moderator w
User avatar
IdOp
Veteran Contributor
Veteran Contributor
Posts: 3873
Joined: 16 Feb 2006 11:27
Location: On the Pacific sea bed, 100 mi off the CA coast.
Contact:

Re: Credit Card Merchant Fee Settlement - Surcharges?

Post by IdOp »

It's hard to be sure since I'm not an expert, the article gives only some general features of the new agreement, and it will be over 1.5 years until merchant decisions need to be finalized. But, to venture a guess it wouldn't surprise me if some merchants started to charge extra fees on cards with the highest surcharges. Presumably these are the cards with the biggest rewards. OTOH, rewards cards are very popular and merchants probably don't want to tick off vast numbers of people, so I'll guess they start by dipping their toes into the extra fee thing and gauge the reaction. Once people get used to it they may lower the bar and charge in more cases.
izzy
Veteran Contributor
Veteran Contributor
Posts: 3019
Joined: 19 Feb 2005 19:06
Location: Winnipeg MB

Re: Credit Card Merchant Fee Settlement - Surcharges?

Post by izzy »

I suspect we are more likely to see rewards more restricted to cards associated with the retailer as per Costco,Canadian Tire and Walmart etc all of whom issue their own name brand cards and sometimes give a greater reward if you use theirs!
"I disagree strongly with what you say, but I will defend to the death your right to say it."
User avatar
cedeebee
Contributor
Contributor
Posts: 109
Joined: 20 Jun 2011 20:10

Re: Credit Card Merchant Fee Settlement - Surcharges?

Post by cedeebee »

The article left a lot to speculation...

Do the provinces named have the right to veto the settlement?

It states that smaller merchants may not be inclined to tack on a surcharge. I would have thought that larger retailers would be the ones to eat it, as it were, as they're generally in a better financial position to do so.

More reason to shop online from the US...
User avatar
kcowan
Veteran Contributor
Veteran Contributor
Posts: 16033
Joined: 18 Apr 2006 20:33
Location: Pacific latitude 20/49

Re: Credit Card Merchant Fee Settlement - Surcharges?

Post by kcowan »

When they did the forced upgrade to premium cards I was in the business and talked to many merchants all of whom were against it. Their fee jumped from 1.8% to 3.5% an average. I considered it a side effect of our Canadian bank oligopoly.

Right now I always go for cash back to avoid the vortex.
For the fun of it...Keith
OnlyMyOpinion
Veteran Contributor
Veteran Contributor
Posts: 4231
Joined: 24 Jan 2014 23:17

Re: Credit Card Merchant Fee Settlement - Surcharges?

Post by OnlyMyOpinion »

Bumping this thread as it seems like it may become more common to see merchants charging a fee for paying by credit card.
Paying with a credit card? Expect to see a fee when you shop under new rules that start now
With record-high inflation, Canadian shoppers are well aware that the cost of just about everything is going up.
...
But they can soon expect to see a new demand for their dollars when they shop, because starting Thursday, retailers and other businesses will be allowed to charge them a fee every time they swipe their credit card once (30 day) notice is provided to card companies.
...
They must also make it clear to customers at the time of payment that there's a surcharge, and it can't be more than they pay themselves. Finally, the surcharge will be capped at 2.4 per cent. But the rules won't be in force in Quebec, because that type of fee is forbidden under the province's Consumer Protection Act...
We won't be using a credit card at merchants that charge us ~2%.
Maybe cash will become king again.
User avatar
AltaRed
Veteran Contributor
Veteran Contributor
Posts: 33398
Joined: 05 Mar 2005 20:04
Location: Ogopogo Land

Re: Credit Card Merchant Fee Settlement - Surcharges?

Post by AltaRed »

I sure hope it will be debit instead, or Apple/Google Pay supported by debit payment. Handling cash is a real PITA and I would stop going through cashier lines where customers are fumbling with cash. It takes 15 times as long to transact in cash as it does to tap a card on the terminal. We certainly won't revert to cash.
Imagefiniki, the Canadian financial wiki The go-to place to bolster your financial freedom
Chuck
Veteran Contributor
Veteran Contributor
Posts: 2048
Joined: 21 Feb 2005 11:48
Location: Manitoba

Re: Credit Card Merchant Fee Settlement - Surcharges?

Post by Chuck »

I'm sure debit will be acceptable. The machines that handle credit generally do both. No one will force you to revert to actual cash I would not suspect.

The only real downside is one will lose the perks of one's credit card (points, cashback, etc.) if substituting debit for credit card payment. Which I suspect I will do once everybody and their dog starts adding a 2% fee for credit.

PS> I have noticed this slowly happening anyways. Many of my recurring utility payments used to be able to be done to credit card, but had to be replaced with bank account autopay as the service providers want those credit card fees in their own pocket.

On the bright side, I see the merchants can only pass on the fees they are charged (max 2.4% currently I believe) as opposed to tacking on an extra percent or two to boost profits they way they do when jacking up prices for inflation.
User avatar
big easy
Veteran Contributor
Veteran Contributor
Posts: 1737
Joined: 27 Jul 2006 11:57
Location: Vancouver BC

Re: Credit Card Merchant Fee Settlement - Surcharges?

Post by big easy »

Personally, I would welcome the fee if I have the choice to pay by debit and avoid it. These points/cash back schemes are just paying you with your own money while the CC company takes a generous cut. I only participate to avoid paying for someone else's rewards.
"Everybody has a plan until they get punched in the face." Mike Tyson
Post Reply