We in the ‘States are applauding the Canadian effort to rein in swipe fees for plastic payment cards. We all know these issues: 25 cents for this card, 10 cents for that card, 30 cents for this other card – plus other “hidden fees” per charge. And, if you are a high risk merchant you probably pay more. Canadian merchants and their merchant account providers are stepping up to help everyone save a little money with the reduction of these fees.
Those with a Canadian merchant account may be behind the latest proposal from a Canadian lawmaker to limit the “hidden fees” to 0.03% of the purchase. This is great, as it can help the customer keep funds in their pocket and the merchant keep more in theirs. When these fees rise, merchants typically raise prices to compensate – which can end up costing them customers. And those who do stick around end up paying more. Everyone wants to save money, and this is the perfect way to make everyone happy.
If successful in Canada, America could jump on the bandwagon – but it may be more difficult. There are so many twisted, tangle webs between the government and the “big banks” that this may never work, but it is worth trying for, since American merchants pay the highest “hidden fees” in the civilized world. American merchants pay up to 4% in plastic payment card swiping fees – which is a 10,000% profit margin for the banks, since it only costs a few cents to actually process the payment. The merchants are losing money, the customers are losing money, and the big banks are reaping the benefits.
This isn’t right, but it Canada and other “friendly” nations can show that it works, perhaps it could someday become a reality in the ‘states. But, American merchants, don’t get your hopes up so soon. Canadian merchant however, can rejoice in the effort that their lawmakers are putting into their work, especially this project, and hopefully it does succeed. Everyone wins – the customers, the merchants, and the merchant account providers, when customers shop more at lower prices.