Small business owners are urging the federal government and major credit card companies to take swift action on processing fees.
The Canadian Federation of Independent Businesses (CFIB) said those merchants need Ottawa to move quickly to deliver on its promise to negotiate with payment networks, financial institutions, businesses and other stakeholders to lower credit card transaction fees, as outlined in November’s fall economic statement.
Nearly three-quarters (74%) of small businesses said that they want to see credit card processing fees drop to no more than 1% of the total dollar sale, according to a new survey by CFIB.
That change would require interchange rates for small firms to be set at 0.7% or less – half of the current average of 1.4%.
CFIB research found 81% of small businesses take a hit to their bottom line to cover the costs of accepting credit cards.
The situation grows more dire with credit card usage rising due to the pandemic, growing online shopping and tight consumer budgets, CFIB said.
"While a handful of large multinationals can get special deals, small firms aren't able to negotiate lower interchange rates on their own," said Dan Kelly, CFIB president, in a release. "Ensuring that smaller merchants can access lower rates – including for e-commerce – is key to relieving some cost pressures, encouraging more small businesses to sell online and levelling the playing field with larger firms."
CFIB has launched a national petition calling for immediate action. The association’s recommendations to the federal government and Visa and Mastercard include: lowering merchant fees to no more than 1% of the total sale; ensuring fees for e-commerce are kept low to allow small firms to compete online; and protecting low-cost Interac debit and the code of conduct.