Business group calls on customers to use debit and cash instead of credit cards
Get out the smelling salts, people: it turns out that credit card companies are out to make a buck, and aren’t particularly kind or charitable about how they do it. The latest revelation is a result of the Federal Competition Bureau—fresh from its MLS victory—looking in to the fees that credit card companies charge to merchants, and the rules that restrict them from encouraging customers to use cheaper forms of payment. According to the Globe and Mail, retailers are gearing up for a fight to try and wean shoppers off their Visa and Mastercard.
The Canadian Federation of Independent Business said Thursday it will launch a consumer campaign in early 2011 to encourage shoppers to use cash or debit, which cost retailers far less in fees.
The CFIB will arm its more than 100,000 members with bold signs, designed to be placed at cash registers across the country, that “promote the benefits” of using those other forms of payment.
“Most Canadians are unaware that small businesses pay huge fees to the banks and credit card companies to process credit card transactions,” says one prototype sign. “Paying with cash or by Interac helps independent firms keep prices down for us all.”
The fees that merchants pay are usually between 1.5 and 3 per cent, but can be higher. Moreover, shopkeepers are forbidden from passing the fees on to their customers (which would make cash and debit cheaper). So they’re understandably happy about the prospect of this all changing. We wouldn’t pop the corks just yet, though. Given the fuss over a five-cent plastic bag in this city, we can’t help but think retailers will get an earful from customers who think any fees ought to just be covered by the seller anyway.
In any case, the CFIB’s campaign isn’t going to start until next year, so keep buying on credit this holiday season, troubled only by the ghost of interest payments to come.
• Merchants mount attack on rising credit card fees [Globe and Mail]
• Corcoran: Why competition czar is wrong about credit cards [National Post]
• Competition watchdog targets Visa, MasterCard over fees [Globe and Mail]
(Image: Andres Rueda)