Canadian businesses may claim hundreds of dollars in credit card discount charges following a multi-million dollar class action settlement with Visa and Mastercard.
The Canadian Federation of Independent Business (CFIB) says merchants can now claim rebates on processing fees charged for transactions dating back two decades.
This regulation comes as the pandemic has accelerated the migration from cash to digital payments, with more and more consumers shopping online.
CFIB senior vice-president of national affairs, Corinne Pohlmann, said credit card fees have become a growing problem for small businesses in Canada.
Interchange rate
Credit card issuers charge merchants what are called interchange rates, a commission taken from each sale and paid to credit card companies, payment processors and banks.
Specifically, the class actions alleged that “certain banks as well as Visa and Mastercard have conspired to establish high amounts of interchange fees and impose rules that restrict merchants’ ability to add additional fees or decline credit cards. Visa and Mastercard at higher fees,” reads a statement released by the law firms handling the case. The class actions were brought in 2010.
It is added in the press release that the settlements totaling a net amount of $131 million were concluded 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 approved settlements and a plan for the distribution of funds.
CFIB says that while the settlement doesn’t change fees, it will allow merchants to pass those fees on to customers starting this fall.
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