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For now, according to the Consumer Protection Laws, this measure remains illegal in Quebec. It is in the rest of Canada where we may see changes, the implementation and details of which will be at the discretion of each merchant.
What you need to know
It was the result of a class action legal battle by Canadian merchants against Visa and Mastercard that changed the game. From now on, merchants will be able to add the interchange fee they usually pay to the customer’s bill, ranging from 1 to 2.5%.
Here’s what you need to know about these changes:
- According to the regulation, merchants will not be allowed to apply more than a 2.4% surcharge to bills
- This fee may also apply to debit card payments, but will be considered a “convenience fee”.
- Merchants can choose whether or not to charge a fee depending on the type of transaction and the type of card, and the amount may also vary from one type to another
Each company that decides to move in this direction will have to give their customers at least 30 days notice before implementing this new policy, which means that we won’t see any concrete changes until early November for most.
The businesses' intentions
According to a survey of its 3,914 members conducted by the Canadian Federation of Independent Business from September 1 to 8, one in five businesses intend to apply the surcharge to their customers’ bills. However, this proportion rises to one in four if their competitors or suppliers choose to do so.
Telus was the first major company to announce the new fee in September, which will take effect on October 17 for credit card payments by adding a 1.5% fee. So far, we have not seen any other company of the same size follow suit.
It should also be noted that interchange fees are often already factored into the price of goods and services (regardless of the payment method). Will this influence merchants to adopt this policy while lowering their prices to keep the total the same for their customers? This will be something to watch out for.
Impact on credit card use
If the majority of your expenses are incurred in Quebec, you don’t need to worry about this news right now, but it will be a good idea to keep an eye on the details of your bills outside of Quebec in the future. Moreover, it is better not to be alarmed since we don’t know yet if this will become common practice or not. At this time, 75% of merchants do not intend to implement these fees.
Despite these changes, it will still be beneficial to pay by credit card if you choose the ones that offer the best benefits and rewards based on your strategy.
We will have to keep a close eye on merchants and businesses that decide to impose these transaction fees on their customers in the near future. In times of inflation, a policy like this one will probably not be well received by consumers. That said, thanks to the perks and offers of credit card rewards programs, it is still possible to come out ahead by using this payment method.
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