Federal Government To Take On Credit Card Fees | Refresh Financial

Federal Government To Take On Credit Card Fees

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Visa and Mastercard have both just recently announced that internal audits of their practices prove that each company has fallen in line with the Canadian Government’s demand that rates charged to merchants be lowered.

Walmart Refuses to Accept Visa

Because of the inflated charges, Walmart, among other Canadian merchants, has taken a stand against inflated credit card fees by refusing to do business with Visa. Which for you, means in some Walmart stores you will no longer be able to pay for your purchase with your visa card (their Manitoba stores, to start with). They have warned that if fees don’t become more reasonable, the refusal to accept visa would expand to all of their locations across Canada.

Visa and Mastercard Completed Audits

Two years were given to Visa and Mastercard to prove they had lowered the fees they charge to merchants in Canada, and that two years has just ended. In light of this, the two companies reported that they have performed audits, and the reports came back saying they were in compliance with the federal government’s guidelines. When pressed for evidence of said compliance, the companies refused to provide the reports from the audits. Canada’s Finance Minister, Bill Morneau, promptly announced the intention of the federal government to perform their own investigation.

How Does it Affect Me?

While the fees charged to merchants such as Walmart don’t necessarily affect you directly, they do affect you in a roundabout way - these fees add operating costs to Walmart’s budget. Their overhead is increased and it needs to be made up for in one way or another. Usually, this means the price of the goods you buy in their stores goes up. That would mean less money in your pocket, because credit card companies like Visa and Mastercard are more or less gouging Canadian merchants.

 

Other countries have strict rules in place regarding the fees major credit card companies can charge their merchants. In fact, Canada pays some of the highest fees in the world. Ensuring these fees are more reasonable is good for your wallet, and for the cost of doing business in Canada. Lowering the cost of credit card transactions is great for corporate giants like Walmart, but it’s also great for the small Mom and Pop operations across the nation. If these fees don’t change, we could see many merchants across Canada refusing to accept your credit cards as payment.

Do you think the major credit card companies should adhere to a lower merchant fee standard? Let us know why or why not in the comments!

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