Ottawa businesses weigh in on fee battle between Walmart, Visa

Ottawa retailers aren't holding their breath for a break in the credit card fees they're forced to pay, despite a public feud between Visa and retail giant Walmart.

Despite Walmart's tough stand, Ottawa Morning business panelists unconvinced retail giant's on their side

Ottawa retailers aren't holding their breath for a break in the credit card fees they're forced to pay, despite a public feud between Visa and retail giant Walmart.

Walmart says it pays more than $100 million in fees annually for customers using credit cards like Visa, MasterCard and Discover.

"The issue is that credit card fees are too high in Canada. We believe Visa's fees should be lower for everyone, whether they are a large retailer, small retailer or a charity," said Walmart Canada spokesman Alex Robertson in an email.

Visa says it offered Walmart one of the lowest rates for any merchant in the country, but the retailer wanted more. If it had given in, Visa said, Walmart's merchant fees would have been lower than those charged to local supermarkets, pharmacies, convenience stores, charities and schools.

Sheena Zain of Aziz and Company says because her store stocks some higher-priced items, she couldn't run a cash-only business.

With Walmart making such bold threats, could smaller retailers in Ottawa follow suit? On Ottawa Morning Thursday, a panel of small business owners weighed in.

Sheena Zain owns Aziz and Company in Centretown.  

"I could not operate my business without plastic ... Because someone can come in my shop and buy $5 worth of incense and someone can come in my shop and buy $500 worth of clothes.

"If I thought more than 60 per cent of customers would be comfortable paying cash? Absolutely. Absolutely. Why would I pay those fees? The banks just get richer and richer ... It's hard to fight against the constant, constant draining of blood," she said.

France Desfossés, owner of Planet Coffee in the ByWard Market, made the decision to accept cash only when she first opened her coffee shop, to avoid the steep fees associated with credit and debit.

"We looked into it and thought, it's too expensive," said Desfossés.
Planet Coffee in downtown Ottawa is a cash-only business.

"People are starting to understand … for the first time in 22 years, this past six months to a year, people have said, 'Oh, good for you.' Because they're hearing about the fees and how hard it is."

Zain agreed.  

"My clients tend to be very socially conscious people and they're asking me now, 'Is it better for you if I pay debit or cash?' Because they're reading about the fees that small businesses are paying. They're reading about how it is back-breaking to continue to pay those fees. And they never go down. They only go up." 

But Zain said she also worries about the impact a deal between Visa and Walmart will have on "the little guy." 

"(Visa is) going to look to recoup that money from somewhere. And it's going to be from small businesses," said Zain, who would like to see government limits on what credit card companies can charge small businesses. 

Rewards cards not helping

Whereas merchants pay a fixed fee for debit transactions, they pay a hefty percentage when customers use rewards cards, Zain said.

"A lot of people don't realize that bonus they get is being paid for by me."

The Retail Council of Canada has also called on the federal government to mandate lower fees for all merchants.

A spokesman for Finance Minister Bill Morneau said the ministry is awaiting results from a report into a voluntary 10 per cent fee reduction by Visa and MasterCard in 2014 before deciding "how we can ensure this market stays competitive in the future."

Ontario Today asked listeners for their take in July

Walmart will soon stop accepting Visa cards at Canadian stores, citing high fees. Open lines with Steve Tissenbaum of the Ted Rogers School of Management at Ryerson University. 27:39