#interchange rates

[chargebacks911rescue]

Limits on interchange fees? Just kidding. Maybe.

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Is Your Business Prepared to Handle Rising Interchange Fees?

Unlike chargebacks, interchange fees truly are an unavoidable cost of doing business. Don’t get red-hot mad--learn more about where merchants can cut excess interchange costs.

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MCCs and Chargebacks

https://chargebacks911.com/what-are-mccs/#1

[rwatimes]

Visa Is Having a Rare Down Year. Is the Cash Flow Machine Finally a Bargain?

➤ Visa is experiencing a rare down year due to headwinds from new payment options like stablecoins, potential legislation on interchange rates, and slowing cross-border volume. ➤ Despite these challenges, Visa's core business remains strong, processing trillions in payments and maintaining a dominant global network. ➤ The stock is trading at a slight discount to its historical averages, presenting a potential buying opportunity for long-term investors, though it's considered a 'great business at a fair price' rather than an incredible bargain.

[lucidpayments]

New Agreement Caps Interchange Fees for Some Small Businesses in Canada

As we’ve been saying since we started in this industry, Canadian businesses are paying way too much when it comes to interchange fees.

But an agreement between the feds, Visa, and Mastercard, which just came into effect last week, may be able to provide some relief, at least for some small businesses.

Truth be told, the Canadian government has been talking about regulating interchange fees for years now, but until recently, it didn’t seem like they were going to do anything about it.

We’ve been covering this specific story for about two years now, but our current federal government started talking about it way back in 2019, when the Liberals began leveraging this issue as part of their election campaign.

Back in 2022, we published our first article on this, which asked, Is the Canadian Government Really Going to Regulate Interchange Fees?

At the time, things were still very uncertain, and whether the government planned to actually bring in regulations was anyone’s guess.

But if you’d like some background on this story, that article is a good place to start.

Then, last year, after the government announced it had reached an agreement with Visa and Mastercard, we published a second piece on this story, Feds Finally Reach Deal With Visa and Mastercard to Lower Interchange Fees for Small Businesses in Canada.

This article goes into great detail on the ongoing fight to lower interchange fees in Canada and sums up the terms of the agreement, so if you want to know more about how this story has been unfolding, you should check it out, as well.

In any case, now that this agreement has come into effect, we want to make sure you’re aware of what’s happening and offer our take on it, as well.

So, if you want to learn more about these changes to interchange fees in Canada and get our honest opinion on what this actually means for your business, then you’re going to want to keep reading.

How Does This Agreement Affect Interchange Fees In Canada?

Earlier this month, the government published a press release outlining what it’s supposedly doing to help small businesses in Canada, including capping interchange fees for eligible businesses.

“The federal government is making life easier for locally owned businesses by introducing reduced credit card transaction fees,” said Minister of Public Services and Procurement Canada, Jean-Yves Duclos.

But how exactly is this going to work?

Well, according to the feds, as a result of these changes, over 90% of small- and medium-sized Canadian businesses will see their interchange fees slashed by up to 27%, and this is projected to save small businesses about $1 billion over the next five years.

With that in mind, here’s what Visa and Mastercard will be doing for eligible businesses as a result of this agreement:

Reducing domestic consumer credit interchange fees for in-store transactions to an annual weighted average interchange rate of 0.95%

Lowering domestic consumer credit interchange fees for online transactions by 10 basis points, offering reductions of up to 7%

Providing free access to “cybersecurity and online fraud resources” to help small businesses sell more online, while preventing fraud and chargebacks

However, only businesses and non-profits with annual Visa sales of less than $300,000 will qualify for lower interchange rates from Visa, and only those with annual Mastercard sales of less than $175,000 will qualify for lower rates from Mastercard.

It’s also important to point out that organizations will have to qualify with each credit card network individually.

The government even provided an example of how this could help, saying that if a business processes $300,000 in credit card payments, it could save $1,080 in interchange fees.

But is this an accurate representation of the interchange fees Canadian small businesses pay?

And is this agreement as good as the government’s making it out to be?

Let’s take a closer look and find out.

Our Take on These Changes to Interchange Fees in Canada

As we said in our last article on this, it’s great to know that small businesses in Canada may end up seeing some relief from the insanely high interchange fees they’ve been paying.

It would have been nice to see these fees reduced even further, but going from an average interchange rate of 1.4% down to 0.95% is nothing to scoff at either.

However, when it comes to this agreement, and this latest announcement, there’s a lot to criticize.

For one thing, the government’s being very disingenuous with its example of the interchange fees a business would supposedly pay.

In its latest press release, the government claims that if a business in Canada processes $300,000 in credit card payments, they’ll pay about $4,000 in interchange fees.

But we did the math on this, and they are really lowballing it.

Because in order to pay only $4,000 in fees on $300,000, the cards you’re processing would have to have a rate of no more than 1.33%, which is pretty much unheard of.

To put things in perspective, if you were to calculate the interchange fees paid on that same amount through Square, which charges rates of at least 2.65%, and is the processor of choice for many small businesses in Canada, it would come to $7,950, which is nearly twice as much as the government’s estimate.

What’s more, even though the government has published several press releases on this agreement, we’re still left with many unanswered questions.

For instance, while the government keeps talking about how businesses will have to qualify with each card network, there’s been no indication of how they can do that, either from the feds or the credit card companies themselves.

So, even as these new changes have come into effect, it’s yet to be seen how businesses will be able to qualify.

Moreover, neither the government nor the credit card companies have given any indication as to where businesses can access the free “cybersecurity and online fraud resources” they’ve committed to provide.

Furthermore, as we’ve learned over the years, many small businesses in Canada are with payment processors outside of Canada, but because this agreement was made solely between the Canadian government, Visa, and Mastercard, there’s no reason to think that these changes will apply to foreign payment processors.

As we outlined above, these reductions are only for “domestic consumer credit interchange fees”, so we can only assume that this applies to Canadian payment processors only.

As a result, many small businesses in Canada will never see these rate reductions, not least because this agreement doesn’t apply to their processors.

Also, in a press release on this agreement published last year, the government said it expects “that payment processors will pass these reductions on to small businesses.”

But if you know anything about our industry, you’d know that many payment processors are notorious for refusing to pass interchange rate reductions on to their customers, instead choosing to obscure these savings by padding people’s bills with miscellaneous fees.

Moreover, the payment processors and the banks are not part of this agreement with the government, so they can continue to do whatever they want, and they will.

Sadly, all of this shows just how out of touch our federal government is with the frustrations of small business owners in this country.

And as far as we’re concerned, this agreement is much too convoluted, it leaves way too many questions unanswered, and it doesn’t go nearly far enough, as it’s not applicable to so many small businesses in Canada.

Unfortunately, there’s nothing we can do to stop the government from being so unclear about this.

But we will continue to cover this ongoing story, making you aware of any new updates, and breaking it down as best we can to help you gain greater clarity on your payment processing.

Are you tired of paying so much for payment processing? Schedule a Rate Reduction Review to see how much you can save with Lucid Payments, or contact us today to learn more.

[lucidpayments]

Why Interchange Plus Pricing Is the Best Way to Pay for Payment Processing

If there was an award for the most convoluted industry on the planet, payment processing would probably win by a landslide.

And if we had to choose the most needlessly complex aspect of our industry, it would have to be how processors choose to charge for their services.

Whether they’re using interchange plus pricing, tiered pricing, or flat-rate processing, typically, payment processors aren’t making things any easier for their customers to understand.

What’s more, business owners don’t seem to have any idea what these various fee structures are, how they work, or which one is going to give them the best deal.

As a result of all this confusion, it seems many businesses are just picking a processor at random without even bothering to look into their pricing.

For instance, a Canadian Federation of Independent Business (CFIB) survey found that 54% of respondents have difficulty understanding the contract they have with their payment processor, and 41% are unsure about their pricing model.

The survey also found that credit card processing fees are unaffordable for 78% of respondents.

However, many business owners are unwittingly choosing to partner with processors whose pricing is deceptively expensive, and the reality is they don’t need to be paying this much.

But given the abject lack of clarity in this industry, it’s no surprise that business owners are getting bamboozled like this.

With that in mind, this article will explain the most common pricing models for payment processing, including interchange plus pricing, tiered pricing, and flat-rate processing.

We’ll break down everything in no uncertain terms, exploring the various types of pricing, comparing them, and explaining why interchange plus pricing is your most affordable option.

If you’re new to this topic, and you’re not sure what the term interchange means in this context, you should start by reading our article, What You Need to Know About Interchange Rates in Canada.

And if you’d like a bit of a refresher on how interchange fees are calculated, you should check out our article, What Determines the Cost of Interchange Fees?

Why Is Interchange Plus Pricing the Best Way to Pay for Processing?

This seems like an easy question to answer, but as you may already suspect, it’s not as simple as you might think.

If you want to understand why interchange plus pricing is your best option, first you’ve got to understand the most common methods of paying for payment processing and compare them.

With that in mind, let’s explore the three most common ways to pay for payment processing, so you can understand why your best option is interchange plus.

Tiered Pricing

Tiered pricing is a pricing model where transactions are categorized into different tiers, each with its own interchange rate. The tiers include these three rates:

Qualified Rate: This is the lowest rate, applied to the most standard and secure transactions, such as swiped or chip-inserted debit or credit card payments.

Mid-Qualified Rate: A higher rate than the qualified rate, applied to transactions that pose a slightly higher risk, such as those involving rewards cards or manually entered card information.

Non-Qualified Rate: This is the highest rate, applied to the riskiest transactions, such as those made with corporate or international cards, or transactions that don’t meet certain security criteria.

This model allows payment processors to charge different rates based on the risk and processing requirements of each transaction.

If you’re being charged based on tiered pricing, that means you’ll have to pay a set qualified rate on every transaction, plus a mid- or non-qualified rate that applies to any transaction that doesn’t meet the requirements of the qualified rate.

So, for example, if a customer is paying with a qualified Visa and actually inserting their card into a physical machine, you’ll probably get a rate of around 1.45%.

Then for every transaction that’s mid- or non-qualified, that corresponding rate will get stacked on top of the qualified rate.

In theory, this model could offer some pretty decent pricing if the company gives you a good deal, but unfortunately, that’s rare.

Typically, providers will set their mid- and non-qualified rates high enough to ensure they’ll make the most profit they can, so you’re not likely to get a very good price.

In these situations, businesses will end up paying something like 0.85% on a non-qualified card, plus the qualified rate, which means they’ll be paying a total of 2.30% (1.45% + 0.85%).

But compared to what you’d be charged based on interchange plus pricing, this is a higher rate than what you’d pay for almost any card that’s available to consumers today.

So, as you can see, not only is this pricing model difficult to understand, but it’s also going to cost you more, as well.

Flat-Rate Pricing

One of the most common complaints we hear from potential customers is that they never know how much they’re going to pay in interchange fees each month.

As a result, many business owners choose to partner with a processor that offers flat-rate pricing, as this type of pricing tends to be advertised in a way that makes it seem like it’s more convenient and easier to understand.

But despite the clever marketing, the truth is that this is the most expensive pricing in our industry.

Providers who offer flat-rate payment processing will typically charge a highly inflated rate to make sure that they’re able to turn a profit on most transactions.

For instance, the average flat rate offered in our industry is currently 2.4%, with some processors charging up to 2.65% or even more.

So, while it may sound great to know exactly what you’re going to pay on every transaction, in reality, what this means is that for the lower-end cards and less risky transactions, you’ll have to pay double what you’d pay with interchange plus pricing, or even more.

To give you an idea of how much more expensive this kind of pricing can be, below, you’ll see Visa’s current interchange rates for consumer cards in Canada.

As you can see, only two of the dozens of cards on this list have an interchange rate of 2.4% or higher. And if you look at Mastercard’s rates below, you’ll see that the list looks very similar.

Again, only two of the cards on this list have an interchange rate of 2.4% or more.

Judging by these numbers, if you’re paying a flat fee that’s anywhere above 2%, you could be costing yourself hundreds of dollars per month in extra fees, depending on your volume of sales.

Truth be told, there are only a couple of different card types that cost more than 2.2%, so no matter how you slice it, paying these higher flat rates will cost you more money.

Interchange Plus Pricing

Hands down, this is easily the best pricing in our industry.

You’re welcome to try, but we can guarantee you’re not going to find anything cheaper.

We use interchange plus pricing because it keeps us competitive, it’s transparent and easier to understand, and it aligns with our mission of putting our customers first and always acting in the best interests of business owners.

That being said, rather than having to charge a high enough flat rate to profit on all cards or creating a convoluted tier system, interchange plus pricing allows us to offer you the exact interchange rate set by credit card companies like Visa and Mastercard, plus a small markup (usually 0.20% – 0.40%), which is how we make our money.

This means if your customer pays with a qualified Visa, you’ll pay 1.25% plus a markup of no more than 0.40%. That adds up to 1.65% or less, which is considerably lower than the average flat-rate pricing in our industry.

And that’s it. It’s really that simple.

With interchange plus pricing, you’ll pay whatever the interchange rate is on the card your customer is using, plus our markup.

This allows you to not only save money but also have greater clarity and peace of mind when it comes to your payment processing.

Another great thing about interchange plus pricing is that when credit card companies like Visa and Mastercard lower their interchange fees, this will immediately be reflected on your bill, which isn’t the case with many providers.

But with Lucid Payments, you won’t have to call in to try and get a better deal, or make sure these savings will be reflected on your statement.

The savings will simply be passed on to you the second that rates are lowered.

Interchange plus is also much more transparent, as well, because you’ll be able to see on your statement which cards you processed, what the interchange rates were on those cards, and what our markup is.

Time to Compare

Using the three different types of pricing we’ve covered today, let’s run a scenario to see which one will offer the better deal.

Let’s say your customers purchased $5,000 worth of products this month, and they all paid with a Visa Infinite card, which has an interchange rate of 1.57%.

For the tiered pricing, you’d be paying 1.57% plus 0.85%, so each one of those transactions would cost you 2.42%.

If you were being charged based on interchange plus pricing, you would’ve paid that same 1.57% interchange rate plus our markup of 0.20%, which would cost you 1.77%.

And for flat-rate pricing, you would’ve paid at least 2.4% on each transaction, regardless of what the interchange rate is on the card the customer is using.

So, if we do the math here, the flat rate pricing would cost you $120 in fees for those $5,000 in sales, and the tiered pricing would cost you $115, but the interchange plus pricing would only cost $88.50.

As you can see from this example, clearly, interchange plus is much cheaper.

And if you’re with a processor who charges you anything but interchange plus, you are simply paying too much.

Want to learn how much you can save with Lucid Payments? Book a Free Statement Review or contact us today to find out how we can help.

[lucidpayments]

What Determines the Cost of Interchange Fees?

If you own a business, and you want to accept credit card payments, you’re going to have to pay interchange fees.

There’s just simply no way around it. If you accept payments with credit cards or debit cards, your bill for payment processing is going to include these fees.

But despite the ubiquity of interchange fees, it’s safe to say that most business owners know very little about them.

What are interchange fees?

Who’s profiting from these fees?

What are the factors that determine their cost?

And why am I, as a business owner, responsible for paying them?

Many merchants are asking themselves these kinds of questions, and over the years, we’ve spoken with our fair share of business owners who have absolutely no idea how to answer them.

From our point of view, this confusion is completely unacceptable, and unfortunately, the banks and credit card companies aren’t making things any easier to understand.

That being said, we figured it would be in the best interests of business owners if they were made aware of all the factors that determine the cost of interchange fees.

So, if you’re confused about the cost of these fees, then you should definitely keep reading.

Because in this article, we’re going to break down everything that determines the cost of interchange fees, so you can have a better understanding of what’s showing up on your statement.

And if you have no idea what interchange fees are, or you’d like a little refresher, then you should check out our article on What You Need to Know About Interchange Rates in Canada.

How Is the Cost of Interchange Fees Determined?

While it may seem convoluted, it’s actually pretty easy to understand how the cost of interchange fees is determined.

Truth be told, some of it is pretty arbitrary, but aside from the capriciousness of credit card companies, there are several other factors that determine their cost.

Below, you’ll find everything you need to know about how the cost of these fees is calculated.

The Rates Set by the Credit Card Companies

First and foremost, the cost of interchange fees is determined by the rates set by the credit card companies.

Typically, these rates are set twice per year, with Visa and Mastercard, for instance, setting their rates once in the spring, and again in the fall.

Sometimes, no changes are made, but typically they will adjust their rates at these regular intervals.

For example, in April of this year, Visa and Mastercard changed their rates.

Among other changes, Visa cut its interchange rate by 10 per cent for businesses that process less than $250,000 worth of Visa transactions annually, and Mastercard lowered its rates on small ticket transactions, as well.

The Nature of Each Transaction

Interchange fees are charged differently, depending on the nature of the transaction.

For example, card-not-present transactions, such as those done over the phone or online, tend to have higher interchange fees than those that are done in person, also known as card-present transactions.

Why is that?

Well, each credit card has a unique chip, and these chips are very difficult to replicate. In addition, each cardholder has their own PIN number, which only they should know.

This means that purchases made in person carry a much lower risk of fraud because if someone wanted to make a fraudulent transaction in this way, they’d have to steal a card, and figure out the PIN.

Whereas, if someone wanted to make a fraudulent transaction over the phone or online, typically, all they’d have to know is the credit card number, which is much easier to obtain than someone’s card and PIN number.

That being said, credit card companies set higher interchange rates on these kinds of transactions, as a way to compensate for the fact that they’re much more susceptible to fraud, and therefore much riskier.

At this point, many of you are probably asking, “But what about tap transactions, or those done with a cell phone or smartwatch?”

Well, typically these transactions are treated similarly to card-present transactions, as each one of these payment methods has its own built-in security features.

Although contactless credit cards don’t require you to enter a PIN, they still utilize chip technology, and typically, they only allow you to make purchases of $250 or less.

Transactions done with cell phones or smartwatches, on the other hand, have their own security features, including passwords, and biometrics like voice, fingerprint, and facial recognition.

The Kind of Credit Card Being Used

Aside from the rates set by the credit card companies and the nature of each transaction, another factor that determines the cost of interchange fees is the kind of card being used.

You see, things like business credit cards and rewards credit cards, which are becoming increasingly common, will have higher interchange fees, as well.

For example, most rewards cards will have interchange fees that are at least half a per cent higher than your run-of-the-mill credit card, if not more.

A standard Visa could run you 1.42 per cent, whereas a rewards card might cost 2.1 per cent. Some cards will even go as high as 2.6 per cent, but that’s actually pretty rare these days.

When it comes to rewards cards, the interchange fees associated with them tend to be significantly higher, in order to compensate for the cost of the rewards programs.

Business credit cards, on the other hand, are often used for larger transactions, which are considered to be much riskier, and therefore, higher fees are charged in order to offset that risk.

Also, credit cards issued by retailers such as Canadian Tire, Home Depot, or Walmart, for example, tend to have higher interchange fees associated with them, as well.

This can be chalked up to the fact that usually, these cards are issued by third-party providers, rather than banks or other financial institutions. At the same time, more often than not, they’re also associated with some sort of rewards program.

The Type of Business Accepting the Payment

In addition to all the other factors listed above, the cost of interchange fees is also determined by the type of business that’s accepting the payment.

Some businesses will have to pay inherently higher interchange fees, while others will pay lower fees, based on the amount of risk they pose to the credit card companies.

Typically, this has to do with the amount of time between when the cardholder pays versus when they actually receive the corresponding product or service.

What does this mean?

Well, in the furniture industry, for example, customers don’t usually pay for an item and then walk out with it the same day, unless it’s something small like a lamp.

So, the customer will pay, a delivery date will be set, and it could be days or even weeks before they actually receive their furniture.

A lot can happen during that time, such as the product getting damaged during shipping, the cardholder finding a better deal elsewhere, or for whatever reason, changing their mind and cancelling the order.

When things like this happen, it often involves what’s known as a chargeback, which refers to when a cardholder disputes a charge on their credit card and asks the card issuer to reverse it.

Sometimes, this requires the credit card company in question to get involved in arbitration over the dispute, and this can eat up a lot of time and resources, hence the higher fees on credit card transactions in these kinds of industries.

Other businesses that are affected in this way include airlines or companies that do home renovations, as there’s usually a considerable amount of time between when their customers pay and when they actually receive the service they paid for.

Another industry that has to deal with higher interchange fees is the cannabis industry. It’s considered to be higher risk, not least because of the fact that this is a brand-new regulatory environment where governments are still testing the waters, and therefore, it involves a lot of uncertainty.

At the same time, some organizations that accept credit card payments tend to pay significantly lower interchange fees, such as non-profits, charities, and churches.

Aside from just being a gesture of goodwill, these organizations present a much lower risk for credit card companies, for a couple of reasons.

First of all, the payments they’d be accepting are usually instant transactions, such as donations, where no one has to deal with any of the issues associated with waiting to receive a product or service.

And obviously, the vast majority of people are not going to dispute a donation to a church or a charity, so these transactions are considered lower risk for that reason, as well.

Are you looking for a payment processing company that will take the time to ensure you understand everything you’re paying for? We are dedicated to providing absolute clarity for our customers. Give us a call today to learn more about what we can do for you.

[lucidpayments]

You May Be Eligible for an Interchange Fee Rebate from this Credit Card Class Action Settlement

Business owners in Canada pay some of the highest interchange fees in the world.

And as part of our commitment to doing what’s best for business owners, we want to do whatever we can to help them save money on the cost of payment processing.

That being said, we think it’s important to make business owners aware of a recent credit card class action settlement from which they may be eligible for a rebate on their interchange fees.

It’s not much, considering how much Canadian business owners have to pay to accept payments with credit cards, but still, every little bit counts.

So, if you’re tired of paying interchange fees, and you’d like to recoup some of what you’ve paid over the years, then you’re going to want to keep reading.

Because in this article, we’re going to discuss the details of this credit card class action settlement, and let you know how you can go about applying for a rebate on your interchange fees.

If you aren’t sure what interchange fees are, or you just want to learn more about them, you should check out our article on What You Need to Know About Interchange Rates in Canada.

Why Are These Interchange Fee Rebates Being Offered?

These interchange fee rebates come as a result of a class action lawsuit that commenced more than a decade ago, in 2010.

According to a press release published at the end of May, this class action alleges that Visa, Mastercard, and certain banks “conspired to set higher interchange fees and to impose rules restricting merchants’ ability to surcharge or refuse higher cost Visa and Mastercard credit cards,” like the rewards cards that have become so popular in recent years.

Now, it’s important to point out that the credit card companies and banks named in the lawsuit have not admitted any wrongdoing or liability, but from our point of view, it’s obvious that they’re trying to save face with these settlements.

Because whether they have liability or not, the cost to accept payments with credit cards has skyrocketed, and it’s becoming increasingly unaffordable, especially for small business owners.

In any case, as a result of this class action, settlements totalling $131 million have been reached with Visa, Mastercard, and several banks, including Bank of Nova Scotia, BMO, CIBC, Royal Bank, and TD.

At the same time, this settlement also gives Canadian merchants the option to pass the cost of interchange fees onto customers by imposing a surcharge on credit card transactions, starting in October.

Merchants can enact a surcharge for whatever Visa and Mastercard credit cards they choose, up to a maximum of 2.4 per cent.

However, in Quebec, the provincial Consumer Protection Act prevents business owners from imposing these kinds of surcharges on customers.

How Can I Apply for an Interchange Fee Rebate?

If your business accepted payments from Visa or Mastercard credit cards at any time between March 23, 2001, and September 2, 2021, you could qualify to receive a portion of this settlement.

Businesses that had an average annual revenue of less than $5 million during the claim period are eligible to receive up to $600, while businesses that had an average annual revenue of $5 million or more during the claim period are eligible to receive up to $5,000.

If your business had an average annual revenue of less than $5 million, you can simply fill out the online claim form, and you don’t even have to provide documentation to prove you paid the interchange fees.

However, there is no way to appeal these undocumented claims. An appeal process is only available for businesses that submit a documented claim and had an average annual revenue of $5 million or more.

In any case, the undocumented claim process is pretty straightforward, and it only requires you to provide your name, contact information, annual revenues during the claim period, and an attestation that you collected credit card payments at some time after March 23, 2001.

It’s also important to point out that there is no cost for submitting your claim, and even if your business is now closed, you may still be eligible to claim money from this settlement.

The deadline to submit a claim is September 30, 2022, and claimants are supposed to receive their payments some time before the end of 2022.

If you want to learn more, the Canadian Federation of Independent Business has a handy little websitethat will tell you everything you need to know. And if you want to file a claim, click here.

What Does This Mean for Canadian Business Owners?

This settlement is a huge win for Canadian business owners, and not just because of the rebates.

Having the ability to impose surcharges gives them greater control over what fees they choose to pay when accepting payments with credit cards.

More importantly, this is just one more indication that thankfully, the relationships between merchants, banks, and credit card companies are improving, and the cost to accept payments with credit cards is going down, as well.

The olive branch extended by this settlement is definitely proof of that, at least from our point of view.

That being said, imposing surcharges on customers is going to be a very awkward balancing act for merchants, and many of them will choose not to do this for fear of alienating their customers.

Certainly, this is going to affect the big corporations much differently than small businesses, just based on the vast differences in terms of volume of sales.

In any case, being able to download interchange fees onto customers is going to affect each industry and business in a unique way, and some will be more likely to do this than others.

For example, when it comes to businesses that do mostly debit sales, it’s not going to make much of a difference.

And for businesses that accept tips, such as restaurants or salons, it’ll probably be easier to impose a surcharge, as most people give 10 or 15 per cent for a tip anyway, so what’s another two per cent?

However, for businesses that sell higher-ticket items, it’s going to be a lot more difficult to justify, as the larger the transaction, the more expensive the surcharge will be.

At the end of the day, we think this is a good thing, as it gives merchants more autonomy, flexibility, and control.

But ultimately, business owners will have to decide for themselves where to draw the line between trying to recoup some of these interchange fees and taking the risk of possibly angering their customers.

Do you want to impose a surcharge on customers who pay with credit cards?

Are you unsure of how to go about doing this?

If you’re looking for advice on how to structure your surcharges, give us a call. We’ll look at your statement to find out where you’re spending the most, help you determine whether it’s worth it, and work with you to create a customized surcharge solution that best fits your business model.