Small businesses feeling the pinch of credit-card fees as e-commerce ramps up
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 under an agreement with Ottawa that took effect last year. But trade organizations say the fees remain higher than in many Western countries, particularly for online 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.
``Smaller companies tend to pay higher fees than large companies do, because they don't have the volumes,'' said CFIB vice-president Corinne Pullman.
She said ``there's no doubt'' digital rates should come down, and that fees should be clearer and more transparent.
While Visa and Mastercard's overall annual rates sit at about 1.4 per cent, fees vary by transaction depending on factors that range from business type to whether a PIN code was used.