Canadian retailers want the federal government to do something about increased charges to businesses from Visa and Mastercard. (CBC)

Coming on the heels of the worst retail sales numbers in 15 years, Canadian retailers are asking the federal government to do something about increased charges from Visa and MasterCard.

They say Canada's two largest credit card companies have been bumping up the rates since late last summer, at a time when many businesses can least afford it due to the economic slowdown.

Every time a customer uses his or her credit card, retailers pay a percentage to the credit card company as a service charge. The amount varies depending on the type of card used and the size of the retailer.

Colin Swanson, who owns Wine Sense on Portage Avenue in Winnipeg, said an increasing amount of his profit is ending up in the coffers of Visa or MasterCard.

'Increases on this level are unconscionable, unjustified on any level.'—Catherine Swift, Candian Federation of Independent Business

"Half the MasterCards and 30 to 40 per cent of the Visas are now these premium cards [that cost retailers] a bigger percentage," he said.

But even purchases on regular Visas and MasterCards are costing Swanson thousands in profits every year, he said.

According to the Canadian Federation of Independent Business (CFIB), the fees cost Canadian retailers somewhere in the range of $3 billion to $5 billion annually.

Criticizing the card companies for increasing these fees now, Catherine Swift, CFIB president and CEO, said, "increases on this level are unconscionable, unjustified on any level."

Businesses want Finance Minister Jim Flaherty to intervene and consider regulating credit card companies, she said, adding she worries some businesses already on the edge could get pushed over.

"Anything could push a barely viable company into bankruptcy. Obviously this is a very bad time to be [increasing rates]," Swift said.

Competition bureau investigating

Officials with both Visa and MasterCard say complaints over any increases are unfounded. In a statement sent to CBC, MasterCard said the hikes "are the first in seven years."

Visa said, "Retailers have other options" if they genuinely believe their card acceptance cost are too high, including choosing to "accept only cash or cheques."

MasterCard has also sent CFIB a letter from its lawyers, warning it to refrain from suggesting Visa and MasterCard worked together on the increases.

The CFIB said the increases started within a month of each other and that's what it has asked the federal competition bureau to investigate.

The competition bureau has confirmed to CBC that such an investigation is presently ongoing.