What You Need to Know About Surcharge Fees in Canada

Whenever you use your credit card to make a purchase, you may be subjected to extra fees by virtue of using your card. These fees may come as surcharges or convenience fees.

Credit card surcharges most often occur at the point of purchase, and there can be strict rules in terms of which cards can charge such fees. In most places in Canada, credit card companies don’t let vendors surcharge credit card purchases. However, according to the merchant rules set by credit card companies such as Visa, American Express, and Mastercard, eligible merchants can charge a service or convenience fee.

It should be noted, however, that this fee has to be clearly disclosed to card owners before a purchase is completed by them. Cardholders must also be informed that they can cancel their purchase without any penalties should they wish to do so.

It should also be noted that according to Canada’s Code of Conduct for the Credit and Debit Card Industry, merchants can offer discounts if their customers wish to use a payment method that is not a credit card.

While customers do not usually have to greatly concern themselves with these details, it is another story for merchants and payment card networks. For instance, merchants and payment card networks may be subjected to rules in order to ensure transparency and correct policy conduct.

One of these important policy elements is that payment card networks must work together with merchants in order to make sure that merchant-acquirer agreements and monthly statements are both easy to understand and contain enough details.

When it comes to the aforementioned agreements, the cover page should encompass a summary of the contract, as well as a box with the fee disclosure information. This information can include but is not limited to monthly minimums and administration fees. Payment card networks such as Visa and Mastercard should have these rates and fees easily accessible on their respective websites as well.

Another policy that merchants and payment card networks should take into account is that the former should get a notice of 90 days minimum should there be fee increases, a decrease in interchange rates, or new fees with regards to credit and debit card transactions. Payment card networks should also allow a notice of 180 days minimum before applying any structural changes. This particular policy is in conjunction with how merchants are able to cancel their contracts if payment card networks fail to notify them of the aforementioned changes in time.

As for the choice between accepting either credit card or debit card payments, it is on the payment card network to help ensure that merchants have that choice. For instance, a merchant can choose to accept only credit card payments and not any debit ones.

When it comes to discounts, payment card networks should also let merchants give discounts that are dependant on the payment method. For example, merchants can give their customers discounts depending on if the latter party uses cash, a debit card, or a credit card to make a purchase. These discounts must be clearly disclosed at the point of purchase.

In the case that a customer holds a premium credit card, the policy of transparency continues to be applied. These cardholders should be well-defined individuals based on their spending habits and income. When a payment card network wishes to delegate a new debit or credit cardholder, they should make sure that the cardholder gives consent to it.

When considering a preferred method of payment, whether you are a merchant or a consumer, it is important to take the fine print into account. Convenience fees and methods of payment can vary between different payment card networks, and one should conduct thorough research before accepting a contract.

Here at Merchant Broker, we believe in upholding a policy of transparency as well. If you have any questions about methods of payment and surcharging laws in Canada, please do not hesitate to contact us. Our team members may be reached at +1 888-668-0733.

Uncategorized

Amazon Pay and the Reinvention of Frictionless Transactions

Uncategorized

COVID-19 and its Effect on Traditional Sports

Uncategorized

UberEats Launches Contactless Order Application for Restaurant Dine-ins

Uncategorized

MasterCard Announces Free Cybersecurity Assessments for Small Businesses

Uncategorized

Visa Token Service Champions Secure Transactions Through 28 New Partners

Associations

TIAC
CIFFA
ttc

Card Brands

visalogo
mastercard
amex
Interac-logo
discover-logo
maestro-logo
JCB-logo
union-pay-logo
diners-club-logo

Contact Us

CANADA OFFICE
Merchant Broker
1 King St. West. Suite 4903
Toronto Ontario M5H 1A1

USA OFFICE
Merchant Broker
2450 St Rose Pkwy
Henderson, Nevada
89074
USA

T 1-888-668-0733
info@merchantbroker.com

©2019 Merchant Broker Inc. All rights reserved. Merchant Broker Inc. is a Registered MSP/ISO of the Canadian branch of U.S. Bank National Association and Elavon Merchant Broker Inc. is an Elavon Payments Partner & Registered MSP/ISO of Elavon, Inc. Georgia [a wholly owned subsidiary of U.S. Bancorp, Minneapolis, MN] Merchant Broker is a registered referral partner of Bambora. Registered Preferred Partner of Ingenico e-Payments International. Referral Partner of Global Payments.