Majority of B.C. businesses not expected to pass on credit card surcharges to customers
One of the most popular ways Canadians pay for just about everything may be getting more expensive.
Starting Thursday, businesses will be able to pass on credit card transaction fees to customers.
The fees can range from 1.5 to 2.5 per cent for cards with perks like cash back or loyalty points. Local businesses are concerned that those additional costs could drive customers away.
“We're hearing from some of our members, ‘How should I stay in business? How can I stay in business?’,” said Anita Huberman, President and CEO of the Surrey Board of Trade.
Huberman says many businesses are already operating on razor-thin margins and can’t afford to lose any customers.
“It's so difficult to be an entrepreneur these days, in the face of so much bottom line erosion and economic challenges. This credit card piece is yet another nail in the coffin for some of our businesses in our community,” said Huberman.
Credit card companies are raking in between $5 billion and $7 billion a year from processing fees. Telus has already announced it will start charging a fee for paying with credit.
However, some small retail shops are hesitant to do the same, for fear of losing business.
“They don't want to burden their consumers, but they don't feel that they should wear that burden of paying that additional fee to these credit card companies,” said Huberman.
The new rule comes after Visa and Mastercard settled a multi-million-dollar class action lawsuit. But it appears most B.C. businesses will not be passing their fees on.
“The vast majority of our own members, around 80 per cent, said that they're really, really not interested in implementing this in their business. And 20 per cent – only one in five – are actually looking at this as an option,” said Annie Dormuth, provincial director of the Canadian Federation of Independent Business for British Columbia and Alberta.
She would like to see Ottawa take action to help businesses.
“Something that the federal government can do is honor its 2021 election promise, and that is lowering credit card fees,” said Dormuth.
Businesses are required to notify their credit card network at least 30 days before starting to surcharge.
They must also post notice they are surcharging, and the amounts of any surcharges at point-of-sale, as well as clearly itemize any surcharges on receipts.
“Business owners are also consumers themselves. They're British Columbians themselves and I think they're all recognizing, of course, the challenging times that are being placed on consumers right now,” said Dormuth.
With files from CTV National’s Kevin Gallagher
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