As a business owner and consumer, here is what you need to know about the new credit card surcharges.

Credit card users may see an additional surcharge on their purchases. Merchants may now charge up to an additional 2.4 per cent⁠ to cover the interchange fees associated with credit card payments.”

You may have noticed, or potentially have already implemented, the new credit card surcharge to your businesses transactions over the last few weeks, following the lawsuit from Visa and Mastercard.  Interchange fees, as you know, get charged to you any time a customer pays with credit. So following the settlement companies are now allowed to pass that charge off to your guests. AHA wants to know, how has the pass off been going (if you have implemented), how your guests have interacted with the implementation, and the overall implementation of the new charge has positively or negatively impacted your customer experience.

We compiled a list of the most frequently asked questions:

Why are the credit card fees so high at 2.4 per cent? Couldn’t they be capped at 1 per cent? 

Actually, credit card interchange fees are sometimes higher than 2.4 per cent, but the surcharge for customers has been capped at that number due to the settlement. However, the surcharge amount you may be charged when paying depends on which credit card you use. 

“The higher the premium of the card, the higher the interchange fee,” said Luciana Brasil, a partner at Vancouver-based law firm Branch MacMaster LLP, which worked on the class-action lawsuit that led to the settlement.

Can a surcharge be applied if I use my Visa Debit card?

No, a surcharge cannot be applied if you use your Visa Debit card or your Debit MasterCard card. It only applies to credit cards, Brasil says. The debit cards use Interac, typically, even if labelled as Visa Debit or Debit MasterCard. 

How will added credit card fees affect my customer’s buying habits?

You will see less transactions with credit cards from your guests, which might affect the overall total of the bill. Research suggests that most consumers charge bigger purchases, and are more likely to “add” more items to their final total when paying with credit vs debit.

That being said, with the rise of cashless options and the introduction of credit card surcharges, more Canadians will likely be more inclined to pay with Interac via tap options. “I think the only thing it’s going to do is make people more used to using debit, but you can use the debit tap thing in all of those cashless environments,” said Brasil. “I don’t think it’s going to affect the ability to pay in a cashless environment.” 

Best Practices for Implementation

Whether you choose to pass the fee off to the consumer or not, here are some best practices your business should know/follow:

  • Educate your guests on the implementation by allowing them to pay with another card. This can be done discreetly and professionally at the end of the meal
  • Give your employees a boilerplate explanation of how to confidently speak to guests, and make sure they are comfortable explaining the surcharge before heading to the table/counter
  • If you have digital menus and want to integrate the messaging, you can easily place it at the bottom of the menu
  • Take note of what your competitors are doing. Are they implementing the fee? How has it impacted their level of service or business?