A small business group is closely watching what happens in the dispute between Walmart Canada and Visa.
Walmart is using its retail clout to stop accepting Visa at stores in Canada. So far only Thunder Bay locations, and soon Manitoba stores have been impacted in the dispute over merchant fees.
Dan Kelly, president of the Canadian Federation of Independent Business says small business could never take on credit card companies like Walmart is doing.
“It’s a courageous move because it’s counting on the fact that consumers are going to stick with Walmart and pay in other ways as opposed to paying with their Visa card. Customers are often very loyal to the form of payment they prefer most and in most small merchant’s cases, the merchant feels like there really is no option-they must take the type of payment that the customer is offering.”
Kelly says it costs merchants between 1.5 and 2.5 percent of the sale every time you pull out your credit card.
Kelly is pleased credit card companies have taken steps to reduce their merchant fees but says Canadian businesses are still paying some of the highest fees in the world.
“We hope that Visa and Mastercard will negotiate lower rates for all merchants. Just yesterday, Visa and Mastercard put forward their independent audits of the fact that they have reduced fees by about 10 per cent on average for small and medium sized firms, but Canada still has some of the highest credit card acceptance costs in the world.”
Come October 24th, Walmart Canada will no long accept Visa at 16 Manitoba stores.
Visa has said it has offered Walmart one of the lowest rates for any merchant in the country, but says the retailer wanted more.