Canadian businesses recently got a much-needed boost in their bottom line with a decrease in transaction fees. In 2018 Visa and Mastercard agreed to cut credit card fees for small businesses. Their cut in fees is estimated to save businesses over $400 million dollars a year. The new credit card rate goes into effect in 2020 and will continue for five years.
While the lower credit card fees are a godsend for smaller businesses, new sales tactics by some credit card processing services may threaten those gains. According to a report by The Star, several small businesses have become victims of abusive sales practices that threaten the money-saving gains small businesses have been granted. These abusive sales practices have included contracts with “abusive” exit penalties and harassing phone calls. In addition, the Canadian Federation of Independent Business (CFIB) reported that in a recent survey of their members, 18 percent said that they have experienced deceptive sales practices and 10 percent have complained about exit penalties.
With the lower credit card fees coming in effect April 2020 many business owners are looking to increase profit and revenue through expanding their target market. Adding or expanding credit card processing both in-store and online offers businesses the larger market they are looking for. In addition, switching to a new credit card processor can save customers thousands of dollars a year in fees. However, business owners need to be careful not to find themselves signing up for shady credit card processors that offer superlow fees but come with hidden fees and harassing sales tactics.