The government has announced new details of an agreement with Visa and MasterCard that will see them lower the amount that they charge retailers when a customer pays for a purchase with a credit card.
Known as so-called interchange fees, they have long irritated merchants by allowing the credit card company to keep a percentage of every sale, instead of a flat fee for each transaction.
On Thursday, the government announced a deal with the two card companies that will reduce interchange fees for in-store transactions to 0.95 per cent, on average.
That means on a $100 purchase, if a customer pays with a credit card, the retailer will get at least $99, where they previously would have kept as little as $97 in some cases.
A government release says on average, the deal will reduce the typical fee that a merchant pays by 27 per cent.
The fee reductions are expected to save retailers about $1 billion over five years and “make credit card transactions fairer for small businesses, which have less bargaining power than larger merchants to negotiate lower rates,” the government said in a release.
Many other jurisdictions, including the European Union, the United Kingdom, Israel, Australia, China and Malaysia, have capped interchange fees at well under one per cent, but in Canada some cards can charge up to three per cent. Currently, the average interchange fee for a Canadian Visa credit card is 1.4 per cent, Visa says.
Merchants were forbidden from passing those fees on to consumers directly for years, but that all changed last fall when the credit giants agreed to settle a class action lawsuit over the matter, a deal that saw them agree to refund businesses hundreds of millions of dollars for what they charged in interchange fees over the years.
Canadian businesses can now charge credit card transaction fees
Canadians who prefer to pay with Visa and MasterCard could get hit with extra fees starting Thursday. After a long legal battle over who pays certain credit card processing fees, businesses can now pass those charges — as much as two per cent per transaction — along to customers.
While businesses welcomed the settlement, it didn’t do anything to govern the actual amount of the fee being charged, and the government hinted in its recent federal budget that it would weigh in on the issue soon.
Businesses with annual Visa sales volume below $300,000 will qualify for the lower fee, as will those who do less than $175,000 from MasterCard.
The Canadian Federation of Independent Business (CFIB), which has been drawing attention to the issue for years, called the deal a “significant accomplishment” but wishes that the timeline to implement the new fee structure could be moved up from its current target of the fall of 2024.
“CFIB will be encouraging government to deliver on its commitment to ensuring other card brands — including American Express — take similar measures … as well as a regular review of the size thresholds to ensure more small businesses can benefit from these lower rates in the future,” the CFIB said in a release.
CALGARY – TC Energy Corp. has lowered the estimated cost of its Southeast Gateway pipeline project in Mexico.
It says it now expects the project to cost between US$3.9 billion and US$4.1 billion compared with its original estimate of US$4.5 billion.
The change came as the company reported a third-quarter profit attributable to common shareholders of C$1.46 billion or $1.40 per share compared with a loss of C$197 million or 19 cents per share in the same quarter last year.
Revenue for the quarter ended Sept. 30 totalled C$4.08 billion, up from C$3.94 billion in the third quarter of 2023.
TC Energy says its comparable earnings for its latest quarter amounted to C$1.03 per share compared with C$1.00 per share a year earlier.
The average analyst estimate had been for a profit of 95 cents per share, according to LSEG Data & Analytics.
This report by The Canadian Press was first published Nov. 7, 2024.
BCE Inc. reported a loss in its latest quarter as it recorded $2.11 billion in asset impairment charges, mainly related to Bell Media’s TV and radio properties.
The company says its net loss attributable to common shareholders amounted to $1.24 billion or $1.36 per share for the quarter ended Sept. 30 compared with a profit of $640 million or 70 cents per share a year earlier.
On an adjusted basis, BCE says it earned 75 cents per share in its latest quarter compared with an adjusted profit of 81 cents per share in the same quarter last year.
“Bell’s results for the third quarter demonstrate that we are disciplined in our pursuit of profitable growth in an intensely competitive environment,” BCE chief executive Mirko Bibic said in a statement.
“Our focus this quarter, and throughout 2024, has been to attract higher-margin subscribers and reduce costs to help offset short-term revenue impacts from sustained competitive pricing pressures, slow economic growth and a media advertising market that is in transition.”
Operating revenue for the quarter totalled $5.97 billion, down from $6.08 billion in its third quarter of 2023.
BCE also said it now expects its revenue for 2024 to fall about 1.5 per cent compared with earlier guidance for an increase of zero to four per cent.
The company says the change comes as it faces lower-than-anticipated wireless product revenue and sustained pressure on wireless prices.
BCE added 33,111 net postpaid mobile phone subscribers, down 76.8 per cent from the same period last year, which was the company’s second-best performance on the metric since 2010.
It says the drop was driven by higher customer churn — a measure of subscribers who cancelled their service — amid greater competitive activity and promotional offer intensity. BCE’s monthly churn rate for the category was 1.28 per cent, up from 1.1 per cent during its previous third quarter.
The company also saw 11.6 per cent fewer gross subscriber activations “due to more targeted promotional offers and mobile device discounting compared to last year.”
Bell’s wireless mobile phone average revenue per user was $58.26, down 3.4 per cent from $60.28 in the third quarter of the prior year.
This report by The Canadian Press was first published Nov. 7, 2024.
TORONTO – Canada Goose Holdings Inc. trimmed its financial guidance as it reported its second-quarter revenue fell compared with a year ago.
The luxury clothing company says revenue for the quarter ended Sept. 29 totalled $267.8 million, down from $281.1 million in the same quarter last year.
Net income attributable to shareholders amounted to $5.4 million or six cents per diluted share, up from $3.9 million or four cents per diluted share a year earlier.
On an adjusted basis, Canada Goose says it earned five cents per diluted share in its latest quarter compared with an adjusted profit of 16 cents per diluted share a year earlier.
In its outlook, Canada Goose says it now expects total revenue for its full financial year to show a low-single-digit percentage decrease to low-single-digit percentage increase compared with earlier guidance for a low-single-digit increase.
It also says it now expects its adjusted net income per diluted share to show a mid-single-digit percentage increase compared with earlier guidance for a percentage increase in the mid-teens.
This report by The Canadian Press was first published Nov. 7, 2024.
