Rodexo
Business News News

JPMorgan Chase unit offers 50% fee cut to retailers on Amex credit card in Canada – Business

JPMorgan Chase unit offers 50% fee cut to retailers on Amex credit card in Canada – Business hi amex credit card


The Canadian Federation of Independent Business has struck a deal with payment processing firm Chase Merchant Services that will see CFIB members — as long as they use Chase’s network — pay much lower fees whenever customers pay for their purchase with an American Express credit card.

The two companies announced the deal on Monday morning, in an attempt to shake up an industry that’s currently dominated by Visa and MasterCard.

While consumers care primarily about the interest rate, annual fees and any perks associated with their credit cards, retailers are keenly aware of the “interchange fees” that come along with them.

Every time a customer pays for a purchase with a credit card, the retailer pays a fee to the company that processes the transaction. Such fees are usually between one and two per cent of the value of the purchase, sometimes more.

In countries other than Canada, they are far lower, and the issue has been a thorn in the side of retailers for years.

Ottawa has taken several steps in recent years to legislate lower fees, which retailers say end up getting passed on to consumers via higher prices for goods and services to cover the baked-in fees.

The issue came to a head last year in a high profile fight between Walmart and Visa, where the giant retailer threatened to stop accepting Visa cards because the fees were too high.

The two sides later reached a confidential settlement, but that’s mainly because companies with the size of Walmart have the leverage to negotiate better deals. Small businesses don’t usually get the same treatment — and despite the focus that the Walmart fight brought, Canadian interchange fees are still among the highest in the world.

Monday’s News targets small businesses that do less than $500,000 in sales on American Express every year. But it will see up to 110,000 CFIB members get their interchange fee for accepting Amex by as much as 50 per cent, to 1.8 per cent of the purchase price, as long as they work with Chase Merchant Services to process their sales.

The CFIB says its members currently process $12 billion worth of sales on Chase’s network, and they calculate that merchants who sign up could save and average of $2,750 per year.

MasterCard deal last year

“This will benefit CFIB members by lowering the cost of offering Amex as a payment option,” CFIB president Dan Kelly said, “while ultimately providing value to consumers with greater access and payment choice.”

Last year, the small business group partnered with MasterCard in a move that saw interchange fees for that card decline by between 12 and 22 per cent.

That brings the MasterCard fee to as low as 1.28 per cent in some cases, but that’s still well above levels seen in other countries. Many OECD nations regulate such fees at well under one per cent, including Germany, France, Sweden, Italy, Portugal, Spain and the UK.



Source : cbc

Related posts

Lloyd’s ‘hires too many middle-class graduates’ according to executive | City & Business | Finance

Rodexo

Why Africa stands to benefit if rise in global temperatures is kept to 1.5°C

Rodexo

Takeda Wins Shareholder Approval for Its Shire Megadeal

Rodexo

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.