By Mike Szostech

A new rule came into effect on October 6, 2022 that allows companies to charge a surcharge on credit card purchases (except in Quebec).

Merchants pay a credit card processing fee that ranges from 1.4% to 2.4% of every transaction. Previously, Visa and Mastercard had rules that prevented retailers from passing along these credit card fees to the customer. However, a class action lawsuit in Canada has now resulted in leaving that decision up to the retailers.

The change won’t happen immediately, or at every retailer. Merchants who intend to start adding a surcharge to credit card transactions in Canada need to go through a specific process which require at least a one-month notice.

In a recent report, up to 20% of small businesses said they are considering adding a surcharge to offset the credit card fees.

In the USA, charging a credit card processing fee is legal in most states. Even still, only a small portion of businesses actually do it. It could be that very few companies choose to add the surcharge fee. Some experts are saying that many people may choose to use cash or debit for purchases. Time will tell if companies will increase their credit card rewards to try and encourage credit card usage.