Paper cheques have made a comeback, as retailers try to avoid high transaction fees on credit cards, according to the Bank of Canada. The Department of Finance has for years threatened to regulate card fees, though no legislation has been introduced to date..“Merchants mentioned accepting a wider range of payment methods because they need to make sales and accommodate an equally wide range of consumer preferences for payments,” said a Bank report 2021-2022 Merchant Acceptance Survey Pilot Study. Researchers said small businesses nationwide were more likely to take payment by cheque than mobile app..The survey said 54% of small retailers accepted payment by cheque last year compared to 34% in 2018. By region the use of cheques was highest in Atlantic Canada at 70% of businesses surveyed followed by the Prairies (67%), Ontario and Québec (54%) and British Columbia (37%)..Business owners told the Bank that cash remains “the fastest and most reliable payment method and has the lowest fees.” Credit cards were least popular due to so-called “swipe fees” that average 1.5 to 3%. “We find most small and medium-sized merchants surveyed still accept cash in their stores and plan on accepting it in the future,” wrote researchers..The Department of Finance in 2021 held online consultations on federal regulation of transaction fees on credit cards. No legislation resulted..The department since 2010 has promoted a voluntary Code Of Conduct on credit card issuers and repeatedly rejected private bills introduced in the Commons and Senate to regulate swipe fees. Visa and MasterCard that process 94 % of all credit card transactions in Canada collect an estimated $5 billion a year in fees on retailers..Australia has regulated credit card fees since 2003. The European Union in 2015 adopted Interchange Fees Regulations that capped charges at 0.3%..Bill C-243 An Act To Amend The Payment Card Networks Act to mandate federal regulation of swipe fees lapsed in the last Parliament. “Who do we work for?” Bloc Québécois MP Alexis Brunelle-Duceppe (Lac-Saint-Jean, Que.), sponsor of the bill, earlier told the Commons. “The answer is simple. We work for the people including those who run a business.”.The Canadian Federation of Independent Grocers in 2020 testimony at the Commons finance committee said tight profit margins, about 1.5%, were squeezed by swipe fees. “The gap that exists between what the main street small business in this country pays and what companies such as Walmart pay is indefensible,” testified Gary Sands, senior vice-president. “It’s inexcusable.”.Walmart in 2016 threatened to suspend all Visa transactions at its Canadian stores over “unacceptably high fees.” The retailer estimated it paid $100 million annually in transaction fees on all credit cards..“If Walmart can get 0.89% why can’t other small and medium-sized businesses in this country get the same?” said the Independent Grocers’ Sands. “The amount of money we’re talking about is billions of dollars.”
Paper cheques have made a comeback, as retailers try to avoid high transaction fees on credit cards, according to the Bank of Canada. The Department of Finance has for years threatened to regulate card fees, though no legislation has been introduced to date..“Merchants mentioned accepting a wider range of payment methods because they need to make sales and accommodate an equally wide range of consumer preferences for payments,” said a Bank report 2021-2022 Merchant Acceptance Survey Pilot Study. Researchers said small businesses nationwide were more likely to take payment by cheque than mobile app..The survey said 54% of small retailers accepted payment by cheque last year compared to 34% in 2018. By region the use of cheques was highest in Atlantic Canada at 70% of businesses surveyed followed by the Prairies (67%), Ontario and Québec (54%) and British Columbia (37%)..Business owners told the Bank that cash remains “the fastest and most reliable payment method and has the lowest fees.” Credit cards were least popular due to so-called “swipe fees” that average 1.5 to 3%. “We find most small and medium-sized merchants surveyed still accept cash in their stores and plan on accepting it in the future,” wrote researchers..The Department of Finance in 2021 held online consultations on federal regulation of transaction fees on credit cards. No legislation resulted..The department since 2010 has promoted a voluntary Code Of Conduct on credit card issuers and repeatedly rejected private bills introduced in the Commons and Senate to regulate swipe fees. Visa and MasterCard that process 94 % of all credit card transactions in Canada collect an estimated $5 billion a year in fees on retailers..Australia has regulated credit card fees since 2003. The European Union in 2015 adopted Interchange Fees Regulations that capped charges at 0.3%..Bill C-243 An Act To Amend The Payment Card Networks Act to mandate federal regulation of swipe fees lapsed in the last Parliament. “Who do we work for?” Bloc Québécois MP Alexis Brunelle-Duceppe (Lac-Saint-Jean, Que.), sponsor of the bill, earlier told the Commons. “The answer is simple. We work for the people including those who run a business.”.The Canadian Federation of Independent Grocers in 2020 testimony at the Commons finance committee said tight profit margins, about 1.5%, were squeezed by swipe fees. “The gap that exists between what the main street small business in this country pays and what companies such as Walmart pay is indefensible,” testified Gary Sands, senior vice-president. “It’s inexcusable.”.Walmart in 2016 threatened to suspend all Visa transactions at its Canadian stores over “unacceptably high fees.” The retailer estimated it paid $100 million annually in transaction fees on all credit cards..“If Walmart can get 0.89% why can’t other small and medium-sized businesses in this country get the same?” said the Independent Grocers’ Sands. “The amount of money we’re talking about is billions of dollars.”
