Canadian businesses will be able to directly claim credit processing rebates following a class action settlement between MasterCard and Visa.
The multi-million dollar deal was settled recently after a shift in consumer focus towards digital, credit card usage versus the cash of yesteryear. As a result of the switch businesses will be able to apply for rebates on transactions fees from the past two decades.
Credit card transactions charge interchange rates on merchants. The rates of these fees change depending on what the transaction is about, with the more advantageous cards charging more on the merchant.
“The more perks on a card, the more expensive it is for a merchant to accept,” said Corinne Pohlmann. “I don’t think consumers understand how big a cost it could be for a merchant.” Pohlmann is the senior vice president of national affairs at CFIB.
“During COVID, cash disappeared and everyone started paying with plastic. Credit cards became much more prevalent so the amount of fees merchants are paying has also increased.”
With the settlement deal in action however, businesses that accepted credit card transactions from the two companies from 2001 and following will be eligible for a rebate, depending on the size of the merchant.
In addition to the rebate business owners will now have the ability to directly charge the fees to customers, even though only a minority of merchants are actually expected to utilize this new opportunity.
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