Credit card fees could be starting Oct 6 (2.Viewing)

Canadian businesses can charge credit card fees starting Oct. 6

About bloody time, I dropped credit cards because they were costing me $35,000 per year in merchant fees. Now I accept only e-transfer on my online stores.

I got a letter from my Merchant provider just before covid hit and they said they are here for small business and would do everything possible to support us. A year later I was paying 35k instead of $30 and that is when I said enough is enough.

Now when a client asks me to use a credit card I charge a 4% fee and as soon as I mention that the client switches to debit or e-transfer.

That decision to make the fee official is a long time coming.

PS. Did you know Costco marks things up by only 13% ??

Guess what the 3% over the 10% is for?

Costco makes a killing on the memberships but I am hoping they drop the 3% and charge it only to the people actually using the credit cards.

And Quebec is exempt...

The new rule allowing businesses in Canada to pass credit card fees on to customers will not apply in Quebec.

The action is prohibited by the province's Consumer Protection Act, according to the Canadian Federation of Independent Businesses (CFIB).

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Quebec exempt from rule allowing businesses to charge credit card fees

Makes you wonder if some provinces might amend their consumer protection laws to prevent this and so it's the same as Quebec.

Personally, I do like using a credit card for everything, makes for a simple bill, everything summarized, easy to track expenses, paid automatically too. Completely hassle free. And of course that comes at a cost.

However, I've always felt like a business should be able offer a lower cost if paying cash. By that not being legal, you're forcing everyone to pay for a service you're not even using when you pay by cash. Does not seem right to me.

On the other hand, businesses will be losing 3% on cash transactions. And cash can also be a hassle for a business too. Gotta count it, secure it, deposit it, keep enough on hand, etc, and now the business will be asked by certain customers to give up the 3% CC fee in order to take cash. If I were a business I'd say, "sorry, cash has its own overhead costs too". Most businesses thrilled by this announcement are the ones who are hiding transactions from CRA.

I could probably save $300/mo on average if I paid everything in cash instead of credit card. So would I give up the convenience of a CC for saving some cash? Hmm. Good question. Cash is a hassle, always running to the bank for more. I would certainly switch some bills from automatically going to a CC every month to be a direct debit from my bank account. I guess I like having that choice.

CRA is probably not too motivated to give people any more incentive to use cash though. Big brother likes to be able to audit you and see where your money comes and goes from.

It will be interesting to see if this amounts to any significant change at all. I kinda predict not, at least for most people and most businesses.

I imagine most businesses will not be doing this. Especially when it can be hard enough to be getting customers these days. Why lose business over it because you’re charging extra? I’m thinking more of the hospitality industry. I would find it annoying if every time I went out to eat I would have to worry about an additional 3%. It’s bad enough prices are already getting pretty high and most people like to take stuff out on waiters/waitresses so it ends up meaning less tip. It is pretty convenient to be paying by CC.

theinvestor said:

I imagine most businesses will not be doing this. Especially when it can be hard enough to be getting customers these days. Why lose business over it because you’re charging extra? I’m thinking more of the hospitality industry. I would find it annoying if every time I went out to eat I would have to worry about an additional 3%. It’s bad enough prices are already getting pretty high and most people like to take stuff out on waiters/waitresses so it ends up meaning less tip. It is pretty convenient to be paying by CC.

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I will guarantee you restaurants will be one of the first to jump on. They are traditionally charged the absolute highest merchant fees and they will be eager to recoup those.

One can still pay by card, just use debit for a free transaction.