Credit Card Changes Will be Costly

If Ottawa permits retailers to adopt new strategies recommended by the Senate committee report on the credit and debit card industries, paying with any form of plastic could get more complicated and expensive.Consumers who want to pay with their credit card may be charged an extra fee at the register for this “privilege”. On the other side, retailers could refuse to accept certain credit cards; this includes the higher reward cards such as the Visa Infinite Card because it will cost the merchant more money to process than a basic Visa.

These new rules could bring about higher costs for cardholders.

Now it is unclear as to whether Ottawa will adopt the committee’s recommendations, but as no deadline has been set, they could come about at any given time.

Retailers are voicing their opinions as they do not want to really charge consumers an extra fee or refuse to accept certain cards but if they cannot negotiate better fees when they handle credit card transactions then they are left with no other choice.

Within the last 18 months, both Visa and MasterCard have changed their rates and fees in a way that makes retailers have to pay more and there is an added complexity to each transaction.

This problem arose when Visa and MasterCard moved to a formula based on what you bought and with what kind of card compared to the old formula of where you made your purchase.

The fees initially might not seem as high, but when hundreds or transactions occur in any given day it will add up in time.

Credit card merchants are saying their rates are reasonably and the premium cards are higher only because more customers spend more money and are more valuable to the merchant.

Only time will tell us whether the new regulations will pass or not, I personally hope they do not but it is definitely not fair for one side to be gaining while the other side (retailers) are losing every time.