Credit Card Service Fee Survey Results

Wondering how other small businesses in the Blue Mountains area have reacted to the changing merchant surcharging rules? You’re not alone.

In October of 2022, a Canadian lawsuit brought against Visa and Mastercard concerning their transaction fees was settled. The decision meant that merchants in most provinces were now allowed to pass on the cost of Visa and MC merchant service fees to their customers, to a maximum of 2.4%.

While this was potentially good news for small businesses, who were now able to offset the rising expenses of transaction fees and payment processing hardware, many businesses were conflicted about whether or not to take advantage of these new rules. Consumers were already balking at rising prices, and merchants worried that tacking on additional processing fees would mean they’d risk losing valued customers to other businesses who chose not to. Without a consensus among local merchants, it was difficult to know what to do. 

Several Chamber members have reached out to us to find out how other businesses have responded, and you’re probably curious, too. The BMCC recently circulated a short, anonymous survey, asking local businesses about their experiences with the new regulations and what, if any, impact they have had. Our goal is to share the results and help our members make informed decisions about what’s best for your business.

The Survey:

1. In October of 2022, most provinces in Canada changed the rules of credit card surcharges to allow merchants to charge their customers up to 2.4% in service fees on Visa and Mastercard transactions. Did your business/organization choose to charge your customers a credit card service fee?
2. If you answered yes, what percentage service fee are you charging?
3. If you did implement service fees, have you tweaked them at all since you began charging them (raised/lowered the percentage you charged, changed signage/receipts/other ways of notifying your customers of the charge, decided to stop charging the service fee, etc), and if so, how?
4. If you did not implement the service fees, did you make any adjustments to the methods of payment you accept (eliminated the credit card payment option, switched to e-payments, etc)?
5. Can you tell us about the feedback you’ve received from your customers about the service fees? Do you feel you have experienced any loss of business as a result of implementing the fees?
6. (Optional) What sector does your business/ organization fall under?

The Results:

1. From the responses that we received from various local businesses and organizations, 91.7% chose not to implement any additional service fees on credit card transactions. Of those, 13% are still considering implementing the fees but haven’t done so yet.
2. Among those who did decide to charge a service fee, the average rate charged was 2%.
3. Of the respondents who initially implemented the service fees, all but one have since stopped charging them due to negative customer feedback.
4. Of the respondents who did not charge service fees, 53% changed their payment methods and stopped accepting credit cards, instead limiting payment options to debit, cash or e-payments. The remaining 47% continued to offer a credit card payment option, but strongly encourage/ incentivize other payment methods. Two respondents said that they have raised the price of bigger-ticket items to cover the credit card processing fees, while one other reported that they only charge a service fee on outstanding balances from larger projects.
5. The responses to this question were anecdotal, and the vast majority of feedback from businesses is that their client base was very strongly against being charged service fees. Some reported that their customers said they would shop elsewhere if service fees were introduced, and that not charging service fees has positively affected customer loyalty. A small minority reported that customers understand why small businesses would chose to charge the service fees but are alarmed by rising costs. One respondent reported that customers are largely unfazed by the service fees, and that they are used to these fees being applied to a growing number of goods and services.
6. The respondents who identified their sectors included: tourism/recreation, agriculture, retail, arts and culture, professional services, health care, property maintenance/ landscaping supplies, and food and beverage.