Merchants across the country are about to face a substantial hike in the fees they pay credit card companies when customers use their cards to make purchases, according to the Canadian Federation of Independent Business (CFIB).
Credit card companies have recently introduced new premium cards to consumers who spend above a certain threshold. The cards can have higher merchant fees if the bank issuing the card detects that a certain dollar amount has been reached on the card.
The CFIB also noted that credit card companies are looking to enter the debit card market in Canada, which has been managed by Interac, a Canadian co-operative venture among the country's financial institutions.
Interac charges a flat fee of $0.065 per transaction. The CFIB said credit card companies would likely switch to a fee based on the percentage of the debit transaction, which would dramatically increase merchant credit card fees.
The CFIB said the average fee for debit transactions in the U.S. is 0.65% of a transaction's value, which on a $1,000 purchase, would result in a $6.50 merchant fee compared with the $0.065 per Interac transaction.
The business association plans to launch a national campaign to inform its members and gather political support opposing the merchant credit card fee changes.