President and CEO at the Canadian Federation of Independent Business (CFIB)
Mediaplanet sat down with Dan Kelly, President and CEO at the Canadian Federation of Independent Business (CFIB), to discuss credit card processing fees and their impact on small business.
How are credit card processing fees impacting small businesses?
Canadian businesses continue to pay some of the highest credit card merchant fees in the world.
More Canadians have been using credit cards in the last few years due to the pandemic, growing online sales and inflationary pressures. While consumers love their credit card reward points, processing fees for merchants add up quickly.
The costs for small businesses are already going through the roof, with the majority (81%) of small firms taking a hit to their bottom line to cover the costs of accepting credit cards. With the increased cost of doing business and lack of staff, business owners don’t have the capacity and time to deal with confusing rules and rates that make it impossible to compare between different processors.
This is why CFIB is calling on the federal government and the credit card industry to take immediate action and lower credit card fees.
What does CFIB recommend the government do?
We’re calling on the government to negotiate lower processing fees for small businesses with Visa and Mastercard. Our recent survey shows that nearly three-quarters (74%) of small businesses want to see credit card processing fees drop to no more than 1% of the total dollar sale.
It’s really important that we focus not only on the interchange rate, but also on processor fees for acquirers and fees that go to Visa and Mastercard. If all these fees combined are kept under 1%, it would relieve some cost pressures, encourage more small businesses to sell online and level the playing field with larger firms.
The federal government and Visa and Mastercard could also help small businesses by protecting low-cost Interac debit and the Code of Conduct and ensuring fees for e-commerce are kept low to allow small firms to compete online.
What can small businesses do to support CFIB’s fight for better credit card fees?
The federal government and the payments industry need to hear from small business owners directly on how credit card processing fees are impacting their business.
Signing CFIB’s petition and letting politicians and Visa and Mastercard know would be a great first step. Our petition is designed to get the message from business owners directly to decision-makers in Ottawa and the payments industry in Toronto to push for change and see the credit card processing fees finally come down.
Business owners can sign the petition to lower credit card fees at www.cfib.ca/credit-cards-petition.