By The Canadian Press on January 6, 2021.
OTTAWA – Industry groups say small businesses are being hammered by high credit card fees on online purchases as the shift toward e-commerce continues.
Visa and MasterCard reduced the fees they collect from businesses to an average annual rate of 1.4 per cent from 1.5 per cent starting last year, but trade organizations say the fees remain higher than in many Western countries, particularly for digital transactions.
The Canadian Federation of Independent Business says the proportion of its 100,000 members that rely on online purchases has doubled to 40 per cent since March, when lockdowns to fight the COVID-19 pandemic shuttered storefronts across the country.
Retail Council of Canada vice-president Karl Littler says the rise in e-commerce sales “inevitably squeezes out cash” from vendors, who would otherwise draw more revenue from cash or debit transactions.
Finance Department spokeswoman Anna Arneson says the government will continue to support small businesses during the pandemic, but cited no plans to bring credit card firms back to the table.
Visa says e-commerce transaction rates are lower than ever, and MasterCard says it is committed to its voluntary agreement with Ottawa that established the 1.4 per cent average rate.
This report by The Canadian Press was first published Jan. 6, 2021.