Credit card transaction costs impact bottom line of some Saskatchewan municipalities

costs and look for ways to control and reduce those expenses,” said Jennifer Henshaw, CFIB’S Policy Analyst for Saskatchewan and author of the report.

CFIB’S report found the cities of Prince Albert, and Moose Jaw have taken alternative approaches to control the costs of credit card processing fees. The City of Prince Albert does not accept credit cards for any payments (including property tax, utilities and fees) apart from at recreational facilities. And the City of Moose Jaw only allows the use of credit cards through a third party online credit card processor called Plastiq for its two major revenues streams (property taxes and utility bills).

Most entrepreneurs are fully aware of the cost of credit cards and take action to minimize them for their own business. In fact, those rising costs led CFIB to negotiate and offer discounted rates to its 109,000 small business members across Canada. Most recently, CFIB reached an agreement directly with Mastercard, which allows CFIB members to get the same rate as individual merchants with over $3 billion in Mastercard sales. This is an industry first and goes into effect starting April 3rd, 2017.

To ensure all municipalities reduce the costs of credit card transaction fees, CFIB recommends the following:

- Educate taxpayers about the impact of credit card fees on municipal operating costs and encourage debit payments at point of sale;

- Conduct regular reviews about which credit card payment processing companies offer the best rates;

- Track and regularly report data on the number of transactions, transaction fees, rates and type of credit card used (i.e. premium versus regular);

- Work with other municipalities to negotiate a lower group processing rate with credit card processing companies; and

- For municipalities which do not currently do so, tender the service provision out to credit card processing companies to obtain the lowest offered rates.

Credit card transaction fees paid by select municipal governments

Regina*

2013 - $241,563; 2014 - $303,865; 2015 - $270,759; Regina Total Fees 2013-2015: $816,187 % increase 2013-2015: +12%

Saskatoon

2013 - $229,814; 2014 - $240,988; 2015 - $261,281 Saskatoon Total Fees 2013-2015: $732,083 % increase 2013-2015: +14%

Swift Current

2013 - $59,592

2014 - $58,428

2015 - $69,716

Swift Current Total Fees 2013-2015: $187,736 % increase 2013-2015: +17%

*The City of Regina figures include debit transaction fees, representing a very small percentage of total fees.