A settlement was reached in a long-standing lawsuit between Visa, Mastercard and Canadian businesses earlier this year. the agreement states that Canadian businesses are now able to charge customers an interchange fee when they use credit to shop.
The agreement states that Canadian businesses are now able to charge customers an interchange fee when they use credit cards to shop.
Prior to the settlement, businesses were responsible for paying said interchange fees, but many are hoping to acquire more revenue by having the consumers pay the extra fee. These fees are noted to be sometimes more than 2.4 per cent.
The settlement did state that this interest fee would be capped at 2.4 per cent so consumers should not see any surcharge higher than this.
It is important to know that the surcharge amount could differ depending on the credit card used. If a consumer uses a credit card that collects more points or rewards, they can expect to have a higher surcharge amount than a lower premium credit card. Currently, the average surcharge amount in Canada is at 1.4 per cent.
How does this affect how one might spend their money?
In our post-pandemic world, consumers have adjusted to businesses encouraging the use of interact tap functions and the use of self-checkout stations, whereas the use of cash for payments has declined.
This means there is greater inclination for Canadians to use interact and with these changes, Canadians will likely opt to use their debit cards whenever possible.
One thing that consumers must know is that although businesses can charge their customers the credit card surcharge, they may also choose not to. For many there are more benefits to not include this added charge.
