Small businesses can claim up to $600 in class action settlement with Visa, Mastercard and banks: Power to surcharge for credit cards coming soon – Canadian Federation of Independent Business says
by Morinville Online Staff
A recent multi-million class-action settlement with Visa and Mastercard presents an opportunity for small businesses that have been accepting those credit cards as payment for the last two decades to receive a portion of the settlement.
The Canadian Federation of Independent Business (CFIB) says the settlement is another small step toward ensuring fairness for many small businesses dealing with expensive credit card processing fees.
“Many business owners find dealing with credit card fees unnecessarily confusing and it is almost impossible to compare rates between different processors. Small merchants have been bearing the cost of premium cards, while the industry restricts their right to surcharge or refuse those cards,” said CFIB Senior Vice-President of National Affairs Corinne Pohlmann in a May 30 media release. “The class action settlement is an important win for small businesses and any financial relief at this challenging time is welcome news.”
How much a business can potentially receive is dependent on business size and annual revenues. Those businesses with annual revenue below $5 million can claim $30 for every year they incurred merchant discount fees between 2001 and 2021 to a maximum of $600.
Businesses have until September 30 to register a claim. Full details on eligibility and claim process can be found at https://cfib.ca/classaction.
Credit Card surcharges coming in October of this year
Mastercard and Visa will also modify their surcharging rules as part of the settlement, allowing small businesses to choose to pass on their merchant credit card fees to customers. That change is expected to come into effect this October.
“For more than a decade, CFIB has been fighting to ensure small businesses are treated fairly and transparently by the credit card industry. While very few merchants are expected to add surcharges for card acceptance, we believe the power to do so will give them additional clout in pushing back against future fee hikes,” said CFIB President Dan Kelly in the same May 30 release.
CFIB says it is continuing to actively lobby the government to lower credit card processing fees for small businesses, something the business lobby group said was 2021 election commitment
“With pressure on almost every line in a small business budget, further relief on payments processing fees is urgently needed,” Kelly said.