Did you know that small business owners in Ontario are now allowed to charge customers for credit card fees?
Visa and MasterCard have given small business owners permission to charge a maximum surcharge of 2.4 percent to customers to cover the cost of processing their credit card fees. This credit card processing fee could apply to any type of business in Ontario from restaurants and bars to florists, coffee shops and other small business retailers.
So what does that mean for the average consumer?
On a hundred dollar bill, customers already pay 13 percent tax on most products and services. And that same customer would pay an 15 to 20 percent if they included a tip for service if it’s a restaurant, bar or other service business.
That same consumer would now have to pay an additional 2.4 percent more to help those same businesses cover the cost of processing their own credit card transaction.
While small business owners debate whether or not to levy this credit card surcharge, and risk losing customers, the real crime being committed is actually by Visa and MasterCard.
Why do credit card companies charge a percentage amount to process your card? Why isn’t it a flat fee instead?
The credit card machine is essentially performing the same function whether the bill amount being processed is $5 dollars or $250 dollars.
It seems like a totally flawed system and everyone just appears to just let it happen without complaint.
While Visa and MasterCard rake in the money and let Ontario small business owners take the blame.