The Canadian Federation of Independent Business has announced today that it has strong concerns about Visa Canada’s plans to increase fees and charges, which it says will negatively affect small businesses having difficulties making ends meet after the recession.
“Canada has the second-highest level of merchandise fees in the world – about $5 billion per year,” Dan Kelly, CFIB president and CEO, told Business in Vancouver. He explained that these merchandise fees are invisible “swipe” fees borne entirely by the merchant, unrelated to interest charges or card fees paid by the consumer but that ultimately get passed on through price increases.
“At a time when small businesses are struggling in an uncertain economy, Visa is about to implement a one-third increase in its slice of the fees small firms pay to process credit card transactions. Small business owners are calling on Visa to reconsider its plans.”
The CFIB said Visa Canada’s plans include:
- increasing card-processing fees from six to eight basis points, a one-third increase, which will be passed on to the consumer, affecting all Canadian merchant Visa transactions beginning April 2013;
- increasing the cost of foreign card transactions by 40 basis points, also in April 2013 – a move the CFIB said will hurt small Canadian hotels, retailers and restaurants; and
- introducing a new “uber-premium” card for those in the top spending brackets, with significantly higher merchant fees, which Kelly told Business in Vancouver merchants can’t refuse but will cost them a lot more to process.
Kelly said Visa appears to have ignored the huge negative impact premium credit cards have on small merchants.
“CFIB will continue its work as the watchdog of the credit card industry in Canada,” said Kelly.
