Credit card fees: Small businesses welcome promised action


Small enterprise advocates say the federal government’s point out of credit score card transaction charges in Thursday’s fall financial assertion is a optimistic step, however will not assist businesses take care of rising prices within the brief time period.

The fiscal replace mentioned the federal government intends to enter into negotiations with cost networks, monetary establishments, businesses and different stakeholders to decrease credit score card transaction charges for small businesses.

Small enterprise advocates have lengthy been pushing for action on these charges, which they are saying are tougher to swallow for small companies and have gotten extra of a problem as prospects transfer away from money.

It mentioned the federal government is publishing draft legislative amendments to the Payment Card Networks Act, and if the business cannot come to an agreed resolution within the months to come back, Ottawa will introduce the laws within the new 12 months to control credit score card transaction charges as a substitute.

In a written assertion Thursday, the Canadian Federation of Independent Business (CFIB) mentioned the federal government’s fiscal replace included a stronger dedication to scale back credit score card processing charges for small businesses.

However, CFIB president Dan Kelly mentioned he is involved reduction on the charges could also be too sluggish to assist with the present inflationary pressures on small businesses.

New guidelines took impact in October permitting businesses so as to add surcharges to credit score card transactions, however a CFIB report discovered many enterprise homeowners had been not sure whether or not they would accomplish that for worry of shedding prospects.

The guidelines do not cut back the charges charged to businesses, a lot of which have already baked the charges into their retail costs.

Kelly mentioned the path the federal government took within the financial assertion is total optimistic and may encourage negotiations with card networks and banks in direction of an early deal.

Small enterprise advocates additionally argue that giant businesses are sometimes charged decrease charges, making the costs unfair for small and medium companies.

The authorities launched consultations into lowering credit score card charges for businesses in August 2021, saying the pandemic quickly elevated digital funds and on-line transactions. At the time, it acknowledged that as a result of small- and medium-sized businesses have much less bargaining energy than bigger businesses, they’re due to this fact topic to transaction charges which can be “amongst the best on the earth.”

Other jurisdictions have already moved to scale back the charges by imposing caps on how a lot businesses may be charged, together with Australia and the European Union.

— With recordsdata from Ian Bickis

This report by The Canadian Press was first printed Nov. 4, 2022.


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