Canadian companies may claim hundreds of dollars in credit card deduction fees after settling a multimillion-dollar class action lawsuit with Visa and Mastercard.
The Canadian Federation of Independent Business (CFIB) says merchants can now claim discounts on processing fees charged on transactions dating back two decades.
The regulation comes as the pandemic has accelerated the transition from cash to digital payments, with more and more consumers shopping online.
CFIB Vice President of National Affairs, Corinne Pullman, said credit card fees are becoming a growing problem for small businesses in Canada.
Credit card issuers charge merchants what are called exchange rates, which are a commission taken from each sale and paid to credit card companies, payment processors, and banks.
Specifically, the class action claims that “certain banks in addition to Visa and Mastercard have conspired to set high amounts of interchange fees and impose rules that restrict merchants’ ability to add additional fees or refuse credit cards. Visa and Mastercard at higher fees,” reads a statement issued by the offices of Lawyer dealing with the case. Class actions were filed in 2010.
The press release adds that settlements totaling $131 million net were made with Visa, Mastercard, Bank of America, Citigroup, Capital One, Desjardins, National Bank, CIBC, Royal Bank, Montreal, TD Bank and Scotiabank.
Although the defendants do not admit fault or liability, courts in British Columbia, Alberta, Saskatchewan, Ontario and Quebec have agreed to settlements and a plan to distribute the money.
CFIB says that while the settlement does not change the fees, it will allow merchants to pass those fees on to customers starting this fall.
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