Credit card fee reduction will have minimal impact on Belleville businesses

Richard Belanger, the co-owner of the Scalliwag Toys store, doubts Visa and MasterCard’s fee reduction will cut his costs. Photo by Kate Shumakova

By Kate Shumakova

BELLEVILLE – While Canada’s largest credit card companies have agreed to reduce the fees they charge merchants, Belleville’s business owners doubt this decision will have a significant impact on business.

Visa Canada Corp. and MasterCard Inc. announced on Nov. 4 they will cut their Canadian credit card transaction fees to an average of 1.5 per cent per transaction for the next five years. Finance Minister, Joe Oliver, said the reductions by the two companies add up to approximately 10%. Visa and MasterCard have committed to start implementing these reductions no later than April 2015.

The announcement came as a surprise for Rebecca Burlington, the owner-operator of Flowers by Dustin.

“I didn’t hear this on the news … I am charged a higher service fee, because I have card-holder-not-present transactions. So, I am not sure that I will get the full discounts. It wouldn’t affect me as larger as other businesses probably, but on the times when I do have the card presence, I would be happy to have a reduction in those rates because they are definitely higher than I would like,” she said.

Richard Belanger, the co-owner of the Scalliwag Toys,  says he is skeptical about the announcement.

“We did hear the news about this decision. They haven’t said exactly how is that going to be cut. It all depends on how it’s done. It will be interesting to see if it will be a real decrease in the transaction fess … we will see,” he said.

Belanger said retailers run into problems with credit card companies because companies have multiple cards and may charge a different transaction fee for each one.  The fee is not always clear, he said.

“There are many promises, but I don’t think it will affect us too much by the time it will be done,” Belanger added.

Bill Saunders, the  CEO of the Belleville Chamber of Commerce, sees the benefits for local businesses.

“Well, generally speaking, keeping credit cards grates low is an advantage that encourages people to consider using credit machine purchase without the additional cost of excessive charges. I think there has been a lot of press confusions in the system, in terms of what rates really are, so publicizing those and fixing them…is a good thing,” he said.

Anil Vadhera, the owner of Roluf’s Travel Inc., doesn’t believe Visa and MasterCard’s decision will affect his business.

“It does not affect me very much because it just cost us 2 to 3 cents, even if you calculate (the fees) for a month, it comes to only between $10 and $15,”  he said.

Consumers are hoping businesses will pass on the savings to them and lower prices.

“I don’t know why they decided to do that, but it’s good,” said Garry Bongard, the  manager of the Stephen Licence Ltd bike store.

“May be it’s a Christmas present,” he added laughing.