Cashback rules have changed (for worse) | Neo Financial | Discussion forum

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Tangerine CC did a similar 'Bait & Switch' a while back.

They lost a Lot of customers by doing that.

Apparently, that didn't bother them.

Go Figure ❗

Dean

Norman1 said
The current interchange on a standard MasterCard is 0.92% for chip-and-PIN charges and 0.87% for tap charges. For eCommerce, it is 1.67%.

Norman1, you seem well versed on interchange rates.

As an aside, do you know the rates paid by governments when city property or federal income taxes are paid?

Do they incur a fee based on percentage or flat fee?
Is there any difference between payment via e-bank transfer, atm bill payment, interac, or other method?

The actual rates paid by the merchant or the government are negotiated with their bank. However, the interchange fee and the network fee have to be covered somehow in the negotiated price.

For example, the federal government is not going find any bank willing to offer a flat $2 per payment to accept online income tax payments by MasterCard. That's because if someone uses their World Elite MasterCard to pay $5,000 of income tax online, the card issuer would be entitled to interchange of 2.13% = $106.50 and MasterCard Canada would collect a network fee of 0.08% = $4.00.

Yes, there is a big difference between payment methods. Pre-authorized debit, bill payment, and Interac debit are fixed fee and inexpensive. In contrast, credit cards, MasterCard debit, and Visa debit have percentage fees and are more expensive. That's why governments tend not to accept the latter three methods for politically sensitive payments like property taxes or income taxes.

I know one city that does offer online credit card payments for property taxes. The catch is that the property tax payment goes through Paymentus and there is a 1.99% service fee.

Interchange and network fees are just what the credit card issuer and card network (like MasterCard) receives. Those don't include the markup by the merchant's bank or the cost of the credit card terminals.

Norman1 said
The actual rates paid by the merchant or the government are negotiated with their bank. However, the interchange fee and the network fee have to be covered somehow in the negotiated price.
[snip]
Yes, there is a big difference between payment methods. Pre-authorized debit, bill payment, and Interac debit are fixed fee and inexpensive. In contrast, credit cards, MasterCard debit, and Visa debit have percentage fees and are more expensive. That's why governments tend not to accept the latter three methods for politically sensitive payments like property taxes or income taxes.

I understand that the fees for CC payments are prohibitive. Any idea what a municipal government pays to allow citizens to pay via debit or bill payment? I couldn't find anything for Edmonton, but figure most municipalities would pay a similar rate. Commercial Debit/Interac is usually per transaction. I don't know about the bill payment method.

An aside, if you want to pay utility bills, property taxes, and more using a credit card, pay no extra fee AND get rewards, look at the CDN Tire MC. Up to 1% in CDN Tire money for all the above (if you qualify for the World Elite card, else it is 0.5% (IIRC)).

MBNA did the same a while back, was 2% back on almost everything now it is within a category of 50k max.

Most of mine was in the same category so I topped out when I reached 50k in purchases.

smayer97 said

An aside, if you want to pay utility bills, property taxes, and more using a credit card, pay no extra fee AND get rewards, look at the CDN Tire MC. Up to 1% in CDN Tire money for all the above (if you qualify for the World Elite card, else it is 0.5% (IIRC)).  

savemoresaveoften said

yup, have done that for a few years now. Thats the main use of that credit card for me. I just have to find things to buy with all those CT money lol. It is good that you can spend it at Sport Chek and other CT owned brand as well.

p/s I use it for property tax, enbridge, alectra, university tuition. The CT money adds up quickly.  

Another similar option is the Capital One MC, but I think it might be a bit better than the CT MC . . .

Our no-fees Capital One MC ('Aspire Cash' version) pays 1% Reward on All purchases & payments. And that 1% reward can be paid out in Cash-Money, at any time. Instead of taking the cash though, we usually just use it to paydown our balance due.

To each, their own.

Dean

There was an earlier, detailed, thread, about how to take advantage of the Cdn Tire CC if anyone wants to pursue it.

smayer97 said

Except many (most?) utilities, taxes, insurance, etc cannot be paid using most credit cards. The uniqueness about CDN Tire is that they make the payment appear to the receiver as a payment from a bank account. So, they have no idea a credit card is being used. So you can still pay using the CDN Tire credit card.  

The only thing I can't pay with my Capital One CC is the balance owing on my income tax, and my property tax. And I have my income tax planned out most years, so that the balance owing is only a small amount.

I'll take 'Cash' over that CT FunnyMoney ... Any Day ❗

My two nickels,

Dean

P.S.
Our other CC is with Tangerine. With that we get 2% Cash-Back on Groceries, Gas & Reoccurring Bills.

savemoresaveoften said

. . .

Do you know if the capital one CC allows university tuition payment ? If so that will be golden to me !

I'm sure Capital One would be fine with it, but it's up to the university ... you'll have to ask them if they can accept tuition payments by CC.

Dean