Canadian businesses can now charge credit card fees | Page 2 | General financial discussion | Discussion forum

RetirEd said
Now I can't believe that anyone is using the food-delivery leeches that take about 30% from the restaurants (on top of delivery fees and tips), which most surely drives restaurant prices up significantly.
RetirEd  

They dont take 30% from the restaurant in the sense the restaurant price are jacked up 30% by the restaurants. Restraurants set whatever price they want on the app, and almost 100% of the restaurants price it 20-30% higher than their physical menu price if order direct. So NO it does not cost the restaurant much and give them an extra venue to make more sales. Its the consumer that pays for the convenience.

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Not to worry, KamWest ⬆

Indications are that Very Few business will take advantage of this new ruling. And those that do ... will most likely do so, at their own peril.

For details, see this CTV News vid & article . . .

➡ https://www.ctvnews.ca/business/canadian-businesses-can-charge-credit-card-fees-starting-oct-6-1.6096370

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'Happy Shopping' with your CC.

Dean

KamWest said
It starts with a few, and as time passes and the shock wears off more and more businesses will add it especially restaurants because they pay the highest merchant fees of almost anyone.

Telus broke the dam. If they can do it, so will everyone else.

Dean said

KamWest said

No, I disagree

It starts with a few, and as time passes and the shock wears off more and more businesses will add it especially restaurants because they pay the highest merchant fees of almost anyone.

Watch and see, the uptake will be small and carefully orchestrated until everyone jumps aboard.

. . .

HermanH said

Telus broke the dam. If they can do it, so will everyone else. 
 

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Business in the US, the UK, and most of Western Europe have been allowed to add a CC purchase surcharge for years now ... but in all that time that's passed, only a very few have dared to follow through with it.

Please tell us why it's going to be so 'Horribly Different', here in Canada ❗

Dean

P.S.
Reminds me of . . .

  

Québec Merchants are not legally allowed to add CC surcharges. So, it's part of their cost structure and may be included in all prices - cash and CC.

It'll be interesting to see how businesses with a presence near Québec (e.g. Ottawa) behave and whether they choose to price consistently across Ontario...

Telus will be interesting. They have a significant presence in Québec. They will have to justify their preferential 'pricing' policy for their Québec customers.

KamWest said
No, I disagree

It starts with a few, and as time passes and the shock wears off more and more businesses will add it especially restaurants because they pay the highest merchant fees of almost anyone.

Watch and see, the uptake will be small and carefully orchestrated until everyone jumps aboard.

Walmart was going to do it a few years back but was not able to, now the discount retailers will be able to say you can buy everything cheaper without a credit card.

Places like costco which mark up at 13% do so because of credit cards, it will be huge if costco drops to 10% and 13% to those using cards.  

+1. It gives all businesses big and small the go ahead to make an extra 2% than before. Who is dumb enough to refuse it if the majority start doing it one by one ?! It will end up just like 7% GST. Still remember how a big shell shock it was when it was first introduced. Now everyone just pay 13% with the 7% lump in and think its all "standard tax" , nothing special.....

Norman1 said
Cash discounts off the actual shelf price have always been permitted.

pooreva said
I never saw 'cash discount' at grocery store???? Food Basics, FreshCo, etc.
Nor at other retailers: Home Depot, Lowe's, etc...

Merchants aren't obligated to pass on their savings on credit card merchant costs to those who pay with cash or Interac debit.

Merchants can embed the credit card merchant costs into the shelf prices. If credit cards cost 2%, Interac debit costs ½%, and cash costs ¼% with the split being 75%, 20%, and 5%, then the merchant will bump up shelf prices by

75% x 2% + 20% x ½% + 5% x ¼% = 1.6125%

That will avoid the hassle of calculating the discount for people to want to pay partly with cash and partly with credit card.

Some merchants will just add 2% to the shelf prices and pick up an extra 0.3875% in profit.

krwilson said
Since you mention 13% I assume you are speaking of Ontario. Provincial sales tax is 8% and the GST is 5%. So the total for the HST is 13%.

Anyway, not arguing, I do see your point.  

yeah was thinking it was a 8% ON 7% GST when GST was first introduced. Then it becomes lump into a 15% tax, and GST reduced to 5% to make it 13%. As time went by, most people think of 13% as "tax" and totally forgot 5 of it was actually GST.

Yes, that's what I meant when I said "significantly" more business. It has to cover these costs without being an onerous fee that drives customers away. The interchange fees might increase, I suppose, as CC companies will probably want their cut.

It's been the same arrangement with my mum's hairdresser and a number of restaurants I patronize. Some of the restaurants simply don't take CCs - and they're not necessarily inexpensive ones either.

I know it is sometimes possible to get a discount for cash with some kinds of transactions. It also sometimes means that the transaction is not being recorded or tax submitted, and the cash is just pocketed, potentially saving the merchant more than the 5-10% quoted for CC expenses.

Of course it's even cheaper if you simply don't go to the hairdresser! Spouse and i stopped with covid onset as we see no need to spend time indoors in close contact with someone who is in close contact with lots of other people. We can get away with this as we never much cared about hair cuts etc anyway and we don't have to please anyone - retirement has its advantages.

Loonie: if we are concerned about double surcharging (priced in + surcharge), we should NOT switch to cash or debit when informed of the new surcharge! That just gives the merchants what they want.

We should, IMHO, ask whether they surcharge BEFORE buying anything, and walk out if they do. Otherwise we should leave our purchases at the counter and walk out, which is more of a pain for us as well as the merchant.

(I do miss my hairdresser, who retired. She became a good friend over time, and I learned some other friends of mine also knew her. My hair's now halfway down my back...)

How many businesses will add the fees? That's crystal-ball gazing, I think. Most likely those whose competitors charge them will also add them. Those with no serious competition, or with illegal but omnipresent "gentlemen's agreement to not compete," certainly will. And utilities certainly fall into that class.

I have always paid my electricity and phone bills by direct bank payment, which is free for me. AND my credit card bills, of course. BC Hydro seems to only allow credit-card payment through a third-party service that charges a fee, though I haven't looked into that recently as I never wanted to. My mobile bill is annual and I paid by credit card - thankfully I won't have to change that until next year.

In news items, I'm seeing interviewed merchants complaining that almost 100% of their business is paid by credit card, and this will help them a lot.

Hey, if almost all their business is via credit card, they are OBVIOUSLY already pricing the surcharge in! BUSTED!

Very small businesses - particularly on-line ones - are also more reluctant to take credit card payments because 1) they pay higher rakeoffs than big merchants (who can often negotiate their own deals, as with Amex), and 2) the penalties for refunds and chargebacks are significant in their business.

(Canadian processing fees, exclusive of fixed costs and some add-ons, range from about 1.5% to 3.5%. A salesthing at Vision electronics tried to tell me they were paying Amex 4.5%, but his boss overheard and said he should tell customers 4%. Even that seems to include other parasitic fees. There is some competition between the companies that provide the terminals, though I have no sources on those levels. Amex is both the card issuer AND the interchange provider, so one might expect they would be able to charge LESS to merchants. I think Australia caps the base fee at 1%, and I don't hear about any shortage of credit-card use there.)

Dean: The EU and Australia have much better consumer protection laws than Canada and the US, with caps on processing rakeoffs as well as restrictions on abusive terms and conditions. And Quebec stands out in its better consumer protection regime, which is why you may see credit card bills explaining different terms for Quebec residents. That province also has protection against unrequested increases in credit limits, and is phasing in higher minimum payments to lessen debt traps. Quebec government forms are also generally better designed and easier to fill out than federal ones.

Too bad the province doesn't do as well protecting Charter rights.

RetirEd