ST. JOHN'S, Sept. 10 /CNW/ - Major credit card companies and the big
banks are about to inflict a huge cash grab on merchants in Newfoundland and
Labrador and throughout this country, warned Catherine Swift, president of the
Canadian Federation of Independent Business (CFIB).
Swift said some new "premium" cards being offered to consumers, who spend
above a certain amount, come with a hitch: their merchant fees are a lot
higher. Merchant fees are the fees paid by businesses when customers make a
purchase. And there's no way the business will know what the fees are - until
it's too late.
Swift added credit card companies in Canada are also looking to enter the
debit card business, now managed at relatively low cost by Interac, a
cooperative venture owned by financial institutions and others. She pointed
out that Interac now charges a flat fee - the transaction size doesn't
influence how much the business pays. Swift fears that credit card companies
could move to a fee based on a percentage of the purchase, which would hike
the fees that merchants pay.
"For example, a purchase of $1,000 would now cost a business around 6.5
cents. But if the charge became 0.65 per cent - the U.S. average - the
business would pay $6.50. That's an increase of almost 10,000 per cent," Swift
She said consumers are not only completely unaware of what the changes
mean for merchants, they haven't even asked for these new cards.
"This can only mean these changes are designed for one reason: to reap
larger profits for banks and credit card firms and complicate the merchant's
ability to know what they are paying to process transactions," Swift said.
The business leader said CFIB has launched a national campaign to inform
its members and the independent business community at large about this issue,
and to engage their support in a political action campaign opposing this
initiative by the credit card firms and banks.
Bradley George, Director of Provincial Affairs for CFIB, said these
changes can only serve to harm small businesses, their employees and the
customers they serve. "These fee increases, when added to rising fuel and
labour costs, will only make it more difficult for small business owners to
compete," said George.
For further information:
For further information: CFIB contacts for media: Catherine Swift: (416)
222-8022. Bradley George: (709) 753-7745. More information on CFIB's web site: