As consumers shift to digital payment methods, credit card fees become unaffordable for small businesses
OTTAWA (ON), March 15, 2022 /CNW/ – More than three-quarters (78%) of business owners say credit card processing fees are unaffordable for their business, according to a survey by the Canadian Federation of Independent Business (CFIB). This is compounded by the pandemic-induced shift to digital payment methods and away from cash.
“The cost of doing business is at an all-time high, and small businesses are finding it increasingly difficult to cope with mounting credit card fees as consumers shift away from cash payments due to the growth in e-commerce and even for small, in-store purchases,” said Corinne Pohlmansenior vice-president of national affairs at the CFIB.
Changing payment options for small businesses throughout the pandemic
92% of businesses now accept debit/credit cards as payment
55% started accepting or increased their acceptance of contactless debit or credit payment methods
33% started accepting or increased their acceptance of online/e-commerce payment methods
53% have decreased or stopped accepting cash as payment
“While credit card processing fees for some in-store transactions have declined in recent years, this has been more than offset by the massive growth in higher costs for e-commerce transactions and the move away from cash during the pandemic,” added Dan KellyPresident of the CFIB.
Small businesses are also less likely to have dedicated experts to manage their financial affairs. More than half (54%) of businesses struggle to understand their contract with their payment processor and 41% are unsure of their pricing model. Processors are not required to use consistent verbiage or display information in the same way, which makes understanding and comparing statements or contracts more complex than necessary for merchants.
CFIB urges the federal government and the payments industry to help small business owners by:
Reduce the average overall cost of credit card fees and ensure that small merchants benefit from prices similar to those of larger ones, as promised by the government in the 2021 federal budget.
Simplify contracts and monthly statements by having different credit card processors use consistent wording and format.
Create an independent dispute resolution process for merchants who have problems with their payments.
Eliminate credit card processing fees on sales tax (HST/GST/PST).
“Consumer preferences are driving more and more businesses to adopt digital payment methods, but many come with hefty processing fees. Some of these costs will inevitably be passed on to consumers, but companies are also worried about getting squeezed out of their markets. As we begin to emerge from the pandemic, the payment services industry and government have an opportunity to do the right thing and meet the unique needs of small businesses by finding ways to level the playing field. and reduce processing costs,” concluded Pohlmann.
The Canadian Federation of Independent Business (CFIB) is from Canada largest association of small and medium-sized enterprises with 95,000 members in all sectors and all regions. CFIB is dedicated to increasing business owners’ chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. To learn more, visit ffic.ca.
SOURCE Canadian Federation of Independent Business
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