Canadian merchants may see rebates after fee settlement with Visa, MasterCard deal
Companies in Canada could also be eligible to assert bank card processing charge rebates following a multimillion-dollar class motion settlement with Visa and MasterCard.
Retailers can now apply for rebates on so-called swipe charges charged on bank card transactions courting again 20 years, the Canadian Federation of Impartial Enterprise (CFIB) mentioned Monday.
The settlement for the category motion, launched in 2011, comes after the pandemic quickened a shift in direction of digital funds as extra shoppers shopped on-line.
“Throughout COVID, money disappeared and everybody began paying with plastic,” mentioned Corinne Pohlmann, senior vice-president of nationwide affairs and partnerships at CFIB.
“Bank cards grew to become rather more prevalent so the quantity of charges retailers are paying has additionally elevated.”
Payment charged each time card is used
Bank cards cost retailers so-called interchange charges on purchases, a charge shared between bank card firms, cost processors and banks.
These charges can vary from as little as round one per cent for primary playing cards to almost three per cent for playing cards that supply rewards reminiscent of money again or loyalty factors.
“The extra perks on a card, the dearer it’s for a service provider to just accept,” Pohlmann mentioned. “I do not suppose shoppers perceive how huge a price it might be for a service provider.”
Whereas the settlement would not change the charges, it does enable companies to use for a rebate of among the charges paid since 2021.
Any Canadian service provider that accepted MasterCard and Visa bank cards between 2001 and 2021 and incurred service provider low cost charges is eligible for a rebate, starting from $30 a yr or as much as $600 complete for small retailers, to $250 a yr or $5,000 for bigger retailers.
Clients can quickly be charged charges instantly
The settlement additionally provides retailers the facility to cross bank card charges on to clients, beginning this fall.
Whereas only a few retailers are anticipated so as to add surcharges for accepting bank cards, Pohlmann mentioned giving companies the flexibility to recoup these charges will assist them push again in opposition to future charge hikes.
In the meantime, the federal authorities has repeatedly pledged to decrease bank card processing charges for small companies.
“They’ve promised to scale back charges for small- and medium-sized companies to charges which might be just like what … huge companies take pleasure in,” mentioned Gary Sands, senior vice-president of public coverage and advocacy with the Canadian Federation of Impartial Grocers.
“However there’s been a deafening silence from Ottawa.”
Sands mentioned the quantity being reimbursed by Visa and MasterCard represents a tiny fraction of charges paid. He additionally expressed concern that the settlement might be utilized by bank card firms as “camouflage of their battle to withstand decreasing their bank card charges.”
“The surcharge is not an answer,” he mentioned. “What enterprise goes to intentionally put themselves at a aggressive drawback by passing these charges on to clients?”
When approached for remark by CBC Information, MasterCard Canada and Visa Canada didn’t instantly reply.
