If your business has accepted two major credits for the last two decades, you may be able to get a share of a class action settlement.
The Canadian Federation of Independent Business (CFIB) recently announced that small businesses that accepted Visa and/or Mastercard as payments dating back to the early 2000s can claim a portion of the multimillion-dollar settlement. The class action was in response to 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 Corinne Pohlmann, senior vice-president of national affairs at CFIB. “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 claim will depend on its size and average annual revenue. Those with annual revenue of less than $5 million may claim $30 per year they incurred merchant discount fees between 2001 and 2021 — a maximum total of $600.
The organization noted that the pandemic accelerated the shift from cash to credit and debit as more online transactions took place.
“The accelerated growth in online payments and their associated costs have significantly impacted small firms throughout the pandemic. Due to pandemic-related lockdowns and restrictions, the use of cash plummeted as sales shifted to credit cards — particularly tap and more expensive e-commerce transactions,” the CFIB’s announcement said.
Furthermore, the settlement will see Mastercard and Visa modify their surcharging rules to allow small businesses to choose to pass on merchant credit card fees to customers. This is expected to come into effect in October.
“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 Dan Kelly, CFIB’s president.