Settlement means businesses will soon be able to pass interchange fees to consumers directly. Businesses in Canada may be eligible to claim credit card processing fee rebates following a multimillion-dollar class action settlement with Visa and MasterCard.
Merchants can now apply for rebates on so-called swipe fees charged on credit card transactions dating back two decades, the Canadian Federation of Independent Business (CFIB) said. The settlement for the class action, launched in 2011, comes after the pandemic quickened a shift towards digital payments as more consumers shopped online.
“During COVID, cash disappeared and everyone started paying with plastic,” said Corinne Pohlmann, senior vice-president of national affairs and partnerships at CFIB.
“Credit cards became much more prevalent so the amount of fees merchants are paying has also increased.” Fee charged every time card is used Credit cards charge merchants so-called interchange rates on purchases, a fee shared between credit card companies, payment processors and banks.
Those fees can range from as low as around one per cent for basic cards to nearly three per cent for cards that offer rewards such as cash back or loyalty points.
“The more perks on a card, the more expensive it is for a merchant to accept,” Pohlmann said. “I don’t think consumers understand how big a cost it could be for a merchant.” While the settlement doesn’t change the fees, it does allow businesses to apply for a rebate of some of the fees paid since 2021. Any Canadian merchant that accepted MasterCard and Visa credit cards between 2001 and 2021 and incurred merchant discount fees is eligible for a rebate, ranging from $30 a year or up to $600 total for small merchants, to $250 a year or $5,000 for larger merchants. The settlement for the class action, launched in 2011, comes after the pandemic quickened a shift towards digital payments as more consumers shopped online. “During COVID, cash disappeared and everyone started paying with plastic,” said Corinne Pohlmann, senior vice-president of national affairs and partnerships at CFIB.
“Credit cards became much more prevalent so the amount of fees merchants are paying has also increased.”
Fee charged every time card is used. Credit cards charge merchants so-called interchange rates on purchases, a fee shared between credit card companies, payment processors and banks. Those fees can range from as low as around one per cent for basic cards to nearly three per cent for cards that offer rewards such as cash back or loyalty points. “The more perks on a card, the more expensive it is for a merchant to accept,” Pohlmann said. “I don’t think consumers understand how big a cost it could be for a merchant.”…
Source: cbc.ca
