Canadian Retailers Hope for Interchange Rate Caps | Canadian Merchant Account

Mar 28, 2016

Retailers are rejoicing this year as Canadian lawmakers are considering a new bill that puts a ceiling on credit card interchange rates. The bill was brought to Canada’s House of Commons by newly elected Liberal MP for Rivière-des-Milles-Îles, Linda Lapointe. The proposed bill would make changes to the Payment Cards Network Act, but does not specify the interchange cap rate. Although the bill does not state the cap rate, Canadian merchants are hopeful that the new rate will bring them some much needed relief.

For the last few years, Canadian retailers have been struggling to make a profit as the Canadian dollar weakens. A recent Retail Council of Canada study, showed that 49 percent of retailers have seen their costs increase over 5 percent. The value of the Canadian loonie dropped 16 percent in 2015, raising the price of U.S. imports significantly. A cap on variable credit card interchange rates could save retailers critical funds at the POS. Most are hoping for rates similar to those seen in Europe. In 2015, European payment authorities set an interchange cap of 0.3%.

For years, interchange rates have been in up in the air. This has led to voluntary interchange decreases of 1.5% between Canadian retailers, and Visa and MasterCard. But this latest proposal faces significant hurdles. Lapointe’s proposed legislation is similar to several bills that have been introduced over the years that did not advance. This particular bill is a Private Member’s Bill, that doesn’t have the majority support of any party. The proposed bill could also require review by Canada’s Competition Bureau, as opponents of the bill claim that interchange caps interfere with a free market system.

But the bill does have the support of retail coalitions. U.S.-based Merchants Payments Coalition and the Quebec Convenience Stores Association (QCSA) are a few retail organizations supporting the bill. Michael Gadbois, QCSA president, believes that Canada is ready for some sort of interchange cap. The QCSA claims that current exchange rates cost retailers CA$7 billion annually.

As Canadian retailers continue to struggle with interchange exchange rates and a weak currency, they’ll need access to competent and convenient payment processing that will grow their customer base. eMerchantBroker has helped Canadian merchants provide credit/debit services, e-check and web payment services, and more. Open your high risk Canadian merchant account today.

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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