# Interac "fees"



## bean438 (Jul 18, 2009)

I recently switched to PCF no fee bank account. The idea was to stop taking out cash and just CC or debit everything. 
Being new to debit is it just me or are more and more retailers charging a "fee" of .25-1.25? 
At this rate there go my savings from the no fee bank account. 

Does the fee bother you? Is it legal? Do they have to pre warn you about it? 
I went out for breakfast. 15 including tip, but I was charged .50. I almost hit cancell and said "sorry I have no cash" and walked out the door.


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## brad (May 22, 2009)

I've only rarely encountered merchant fees for using Interac. Usually they warn you with a sign at the cash register; I can only think of a few places in the past five years that have charged an additional fee for using it (there are still plenty of places that don't do Interac at all, of course). But maybe it's different in other provinces; I'm in Québec.


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## OhGreatGuru (May 24, 2009)

Here's an interesting letter from CFIB to the Canadian Bankers' Association, Sep.2009
http://www.cfib-fcei.ca/english/adv..._finance/1292-debit_card_processing_fees.html

It sounds like VISA & Mastercard are trying to take over the debit card processing business, and adding fees in the process.


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## Cal (Jun 17, 2009)

I have seen fees, but only for purchases under $5. (and the fee has been 15c or 25c)


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## the-royal-mail (Dec 11, 2009)

Use cash. It's free, fast and practical. All these debit transactions have fees galore. Of course, the marketing money is thrown at debit transactions where they can run usage reports and charge you more for using it more. No one is charged a fee for using cash and it is accepted everywhere.

For purchases exceeding $40, use your credit card.

The only thing I use my debit card for is withdrawing money from the ATM. That's it.

I am disappointed that the gov't isn't protecting citizens from predatory fees by these companies. The CC companies are becoming as bad as paypal and ebay with their bloody fees. They would charge you for sneezing too, if they could figure out a way to run a report to show when you sneezed.

Don't let them run reports. Use cash.


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## bean438 (Jul 18, 2009)

Maybe its a winnipeg thing or I just have bad luck and the first 8 or so places I used interac charged a fee. I don't think it is Interac I think it is the merchant. 
3 places had a sign, 2 stores the clerk "warned" me when I told her "Interac". It was the breakfast joint that offered no sign. I seriously almost walked out, and I should be allowed to do so. I carried no cash, and had I known about the fee I would have probably ate somewhere else. 
I used to carry cash but thought swiping from now on would be easier.


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## mogul777 (Jun 2, 2009)

I've only seen this for small purchases and even then at dollar store type places. There are a couple of discount gas stations that encourage people to use cash. The reason is of course that the merchant is paying for the use of these non-cash transaction services.


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## bean438 (Jul 18, 2009)

Merchants pay for Interac? I know creditcard companies take a %, and i can see paying for hardware, but what is the charge to a merchant for Interac?


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## the-royal-mail (Dec 11, 2009)

bean, it may seem easier on the surface. You need to decide if that ease is worth the predatory costs.

I don't feel it's worth it. The exercise to go to the ATM to withdraw cash every week is beneficial, it saves me a boatload of money on fees, doesn't hold up lines in stores and is faster and simpler to use cash. It's also safer from fee predators (who should be far more worrisome to people than street muggers) and from PIN number skimming schemes to use cash for the higher number of low-dollar purchases. You could not have walked out of that restaurant, they would have called the police. To avoid these sorts of situations (many merchants won't take plastic for sub-$5 purchases, I don't blame them) carry cash.


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## Dr_V (Oct 27, 2009)

I use my 1% cash-back credit card for _every single purchase_ imaginable. If it's a bill that I can pay on my CC, I will. If it's a $0.25 doo-dad that I need from Walmart, I will still use it.

What do I do with companies/restaurants/etc. that charge me a fee for using my credit card? I simply don't shop there.

I have profited greatly from my credit card, having received literally thousands of dollars in rebates over the years. ( Now that I'm married, my wife and I average over $450/year for the cash rebate.) I suppose that I also get fraud & warranty protection too, though I've never needed to use these features.

It is worth noting that I have_ never_ (in 15+ years) carried a balance on my credit card. I would not advocate this approach if you think that you might forget to pay the bill one month. 


K.


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## brad (May 22, 2009)

Dr_V said:


> I have profited greatly from my credit card, having received literally thousands of dollars in rebates over the years.


You're not the only one who has profited, though. See the NY Times series, "The Card Game," which shows how the use of credit cards, especially rewards cards, has led to inflated prices for everyone:

http://topics.nytimes.com/topics/news/business/series/card_game/index.html?hp 

And on rewards cards in particular:

http://www.nytimes.com/2010/01/09/your-money/credit-and-debit-cards/09money.html

I've profited from my rewards card too, but reading this stuff has soured it a bit for me.


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## mogul777 (Jun 2, 2009)

Dr_V said:


> I use my 1% cash-back credit card for _every single purchase_ imaginable. If it's a bill that I can pay on my CC, I will. If it's a $0.25 doo-dad that I need from Walmart, I will still use it.
> 
> What do I do with companies/restaurants/etc. that charge me a fee for using my credit card? I simply don't shop there.
> 
> ...


And how many reward dollars do you get from a $.25 purchase? Seems like a lot of wasted effort for something so negligible. Then we could factor in the actual value of the "rewards", but that would be a whole other chapter. Of course the "doo-dad" isn't 25 cents anymore either since the merchant will pass on that added cost you gave to all of us one way or another.


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## ghostryder (Apr 5, 2009)

mogul777 said:


> And how many reward dollars do you get from a $.25 purchase? Seems like a lot of wasted effort for something so negligible. Then we could factor in the actual value of the "rewards", but that would be a whole other chapter. Of course the "doo-dad" isn't 25 cents anymore either since the merchant will pass on that added cost you gave to all of us one way or another.


But it adds up over the year. And most retailers I go to don't offer any discount for cash. So if the price is the same, I might as well get my 1%.

If a retailer offers a discount for cash, and it is more than I am going to get from my CC then I will use cash. If not, I might as well us my CC.


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## ChrisR (Jul 13, 2009)

I'm also in Winnipeg, and I know that there are lots of businesses here that charge for Interac. 

I personally don't like carrying cash, because it becomes so much easier to make those little purchases. A buck on a cup of coffee here, a buck on a candy bar there...

I pretty much use my PC mastercard for everything I buy now. The solution to those little 25 cent purchases? I don't make them. In fact, anything under about $20, and I'm forced to really think about whether that's something that needs to be on my credit card... and I almost always end up deciding that no, it doesn't!


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## Larry6417 (Jan 27, 2010)

I'm going to be the devil's advocate. Debit cards and reward cards are services provided by financial companies. The service they provide isn't free. It's up to individuals to decide if the fee is worth the service provided. However, consumers need full transparencey to decide that. See www.cbc.ca/consumer/story/2009/04/16/f-cardfees.html


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## ChrisR (Jul 13, 2009)

Thanks for the link. Great article.

The problem with looking at the cost to the merchant, is that this cost is being charged to consumers regardless of what payment type they use. I might as well use a credit card and collect the rewards... because the fee has already been baked into the price of the merchandise (and the price doesn't go down if I choose to pay cash).

One of the big advantages to using a credit card is that the merchant cannot charge the consumer more for the service (as per their agreement with the credit card companies). Whereas, with interac, the merchant is free to add on extra fees at their leisure.

I actually don't like the idea of government setting the credit card fees. Another way to reign in these fees would be to let merchants pass fees directly to the credit card customers (ie. force Visa and Mastercard to change their policy). I expect that paying 2% more for your purchase would make those 1% cash back cards seem a whole lot less appealing.


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## mogul777 (Jun 2, 2009)

ChrisR said:


> Thanks for the link. Great article.
> 
> The problem with looking at the cost to the merchant, is that this cost is being charged to consumers regardless of what payment type they use. I might as well use a credit card and collect the rewards... because the fee has already been baked into the price of the merchandise (and the price doesn't go down if I choose to pay cash).
> 
> ...


No it doesn't go down if you pay cash, but it can go up if you pay with credit. Don't think because they can't actually charge more for a credit purchase that it isn't "baked" into the price at an increasing scale. Costs will be covered by the end user regardless. By using credit you are adding cost to the merchant which they will pass on to all consumers regardless how they pay... thanks to the agreements with Visa and MC. They of course also have to make some cash on a "fair" playing field. 

In case it still isn't clear what I implied above is that your 1% reward is in actuality actually costing you more than 1%. Sure one percent is better than the zero you get when paying with cash, but that's on the surface. Again in actuality you are simply increasing cost and actually observing a diminishing return. You could say excessive use is abusing the system, and as is always the case in the end everyone is worse off for it.


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## ChrisR (Jul 13, 2009)

The thing is, it doesn't actually matter so much what I do... it is what everyone else does. And it certainly appears that everyone else plans on paying with their reward cards for the foreseeable future.

Look at it this way: Until 6 months ago, I did most of my shopping with cash or a credit card that had a virtually non-existent reward program. Unfortunately, I was already paying the baked-in fees for the high-reward cards, because the fees are being spread out to all consumers.

When I switched to the reward card, the prices of the things I buy did not go up, and neither did the fees I pay.

The only difference to ME is that now I get 1% of my purchase price back. I understand that my actions add to the total effect of rising fees. But if I look at it from the point of view that I am not going to change the behavior of others, and I want to keep as much of my money in my own pocket as possible, then it only makes sense to use the credit card and collect the reward.

Added in edit: By the way, I would prefer if the government banned the "strong-arm" tactics that prevent retailers from setting prices to match the fees they pay. If the local pizza shop passed the credit card fees directly onto the credit card user, you can be sure that I would be paying cash!


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## Berubeland (Sep 6, 2009)

Weather you get charged a fee or not when using Interac depends on depends on the provider of the Interac service.

We set up an Interac in a building I worked at and TD was the provider and we were not allowed to charge a fee for use. We had to pay a rental fee for the machine and a percentage of the transaction amount for Credit Cards. I have noticed that the Interac machines that allow an additional charge are usually the small weird brand names ones in Ma & Pa stores rather than the bank provided ones. The bank has more stringent requirements than the smaller providers. 

I use my Interac for 99% of my business purchases and use my bank statements to tabulate my receipts for income tax purposes. It's a lot easier to keep track of my purchases that way. No screwing around sorting through mounds of receipts. I keep them in a banker's box for the CRA should they come calling. They can sort them and organize them by date too and figure out what the faded and misprinted ones are for. 

As for handling cash and keeping cash for all purchases as Royal suggested it's just not practical for my purposes and I'd run the risk of losing my purse or wallet or being assaulted. Here in Toronto no one accepts $50 and $100 bills anymore. I do accept cash as part of my job collecting rents and on the 1st sometimes I'm carrying 7000 to 10,000 in cash on me as I go on my rounds...I always breathe a sigh of relief when I deposit mostly because it's not my money.


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## Dana (Nov 17, 2009)

I have also noticed some interac fees but always at independant merchants that I frequent. The dry cleaner we use won't even let her customers use interac if the purchase is less than $10 because she says the fee she has to pay makes it not worthwhile for her. 

I use a cashback c/c for anything over $10 and cash for anything under $10. I go to the ABM every other week and take out enough cash to cover our small purchases. If we use it up before the next trip to the bank, then we don't spend anymore.


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## Larry6417 (Jan 27, 2010)

*rewards*

There's an old joke about two hikers who enter bear territory. One hiker is careful to tie his gear/laces tightly in case of meeting a bear. The other hiker asks," Why do that? You can't outrun a bear." The first hiker says," I don't have to outrun the bear. I have to outrun you."

That's how I feel about card fees. I agree with Chris. Canadians love their debit and credit cards. As long as Canadians do, fees will exist and be part of the price of goods and services. You cannot escape fees even by paying cash. If you do pay cash, then you do the merchant a huge favour. The merchant collects the price of the good or service and the card fee without turning over the card fee (I mean the cost embedded in the product, not the transaction fee). By paying cash people pay the cost of card fees (included in the price of the good or service) without any of the benefits. Cash is a perfectly valid option if people have a spending problem. For people who always pay their balance on time, it doesn't neccessarily make sense.

I dislike using debit cards for a reason different than stated in this thread: fraud. I'm not saying fraud is more common with debit cards than credit cards. I'm saying that the effect is different. With a debit card your money is missing immediately. You can file a claim to get it back, but that process may take months. With a credit card you have a grace period to check for purchases.

I look at credit cards this way: there's an average cost per transaction and per consumer. That price is set such that the merchants and card companies make money off the tranaction. Consumers can "win" by keeping their transaction costs lower i.e. pay balance in full each month (users who carry a balance pay a disproportionate amount of the costs of credit cards) and using no fee cards. There are at least 2 no annual fee cash-back cards. Also, card users can benefit from reward cards if they go "all in" i.e. use their reward cards for everything. I use my rewards card for everything - groceries, insurance payments, utiilities, etc. These are expenses I would have to pay anyways, so I may as well get something for them. The monetary value of the rewards I get is several times the cost of the card's annual fee. It's also substantially more than I would get if I paid the same expenses with cash or cheque (nothing!).

There's a site that compares credit cards. I found it through a link from one of Rob Carrick's columns. It has a good overview of cards, but I suspect the site gets "kickbacks" for advertising cards. You may want to take some of the card reviews with a grain of salt. See banknerd http://banknerd.ca/category/rewards/


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## Bank Guru (Mar 8, 2010)

Larry6417 said:


> There's a site that compares credit cards. I found it through a link from one of Rob Carrick's columns. It has a good overview of cards, but I suspect the site gets "kickbacks" for advertising cards. You may want to take some of the card reviews with a grain of salt. See banknerd http://banknerd.ca/category/rewards/


Thanks for the mention, we have been mentioned several times by Rob Carrick just like many of the sites in here. Thanks for the compliment, we strive to provide unique and high quality content for consumers. 

We actually do *not* receive any 'kickbacks' from advertising cards. We learned early on that if we can provide for the consumer, the consumer will provide for us later (we only do sponsorship articles and direct ads on the site). 

Hope that clears up anything.


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## Larry6417 (Jan 27, 2010)

Bank Guru said:


> Thanks for the mention, we have been mentioned several times by Rob Carrick just like many of the sites in here. Thanks for the compliment, we strive to provide unique and high quality content for consumers.
> 
> We actually do *not* receive any 'kickbacks' from advertising cards. We learned early on that if we can provide for the consumer, the consumer will provide for us later (we only do sponsorship articles and direct ads on the site).
> 
> Hope that clears up anything.


Your site is very useful and well-designed. Could you explain what you mean by "sponsorship articles"?


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## Bank Guru (Mar 8, 2010)

Larry6417 said:


> Your site is very useful and well-designed. Could you explain what you mean by "sponsorship articles"?


Thanks for the compliment. Means a lot, we try very hard to develop a really consumer related site. 

Our sponsored articles are when a person or company wants to put an article (either created by us or by them) on our website. They typically want to do this to grab some of our "Link Juice" and generate traffic to their site. All sponsored articles are disclosed as "Sponsored". Which means, at the top of the article it will clearly state "This article is sponsored by [company]". We have only had two such sponsored articles and they were personal finance related. 

We do allow guest posts on our site (as long as we are allowed to guest post on the the requesting parties site).

Sorry, I feel like i have hijacked this Interac "fees" topic.


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## brad (May 22, 2009)

Larry6417 said:


> I dislike using debit cards for a reason different than stated in this thread: fraud. I'm not saying fraud is more common with debit cards than credit cards. I'm saying that the effect is different. With a debit card your money is missing immediately. You can file a claim to get it back, but that process may take months.


This doesn't jibe with my experience. My debit card was cloned a few months ago and $500 was withdrawn from my account. The bank detected the suspicious activity immediately, froze my account, and notified me (over a holiday weekend no less). The stolen $500 was immediately credited to my account and I was back up and running with a new card (same account, different debit card number and PIN) the next business day. I spent about 10 minutes at the bank filling out a form or two, but that was it -- no delays, no significant hassle.

In contrast, my credit card has been cloned three or four times in the past seven years. It seems credit cards are much more heavily targeted by frauders than debit cards. And in fact the hassle factor for me when my credit card is cloned is much bigger than when my debit card was cloned, because I have about 10 monthly bills and charitable donations that are paid automatically with my credit card. When you get a new credit card to replace the one that was cloned, you get a new account number. That means you have to notify all the services and merchants that make automatic monthly charges to your card. 

In contrast, when your debit card is compromised and you get a new debit card to replace it, your bank account number remains unchanged. If you have automatic payments from your bank account they will continue as before, no need to notify anyone of a new account number.


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## humble_pie (Jun 7, 2009)

hello bank guru, your website certainly does look useful, but i can't tell how it's designed because it's so mixed up on my browser that i had to depart quite quickly.

i still have ie 6. This is not causing problems on any other website, although MS keeps exhorting ie 6ers to buy windows 7 & ie 8.

is ie 6 the problem ? do you hear this from other site visitors ?

i'll try to check out banknerd dot ca next time i'm at another computer & let you know.


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## Bank Guru (Mar 8, 2010)

humble_pie said:


> hello bank guru, your website certainly does look useful, but i can't tell how it's designed because it's so mixed up on my browser that i had to depart quite quickly.
> 
> i still have ie 6. This is not causing problems on any other website, although MS keeps exhorting ie 6ers to buy windows 7 & ie 8.
> 
> ...


Thanks for the heads up. We didn't know we had an issue with any browsers. I regularly check browser compatibility, just like analyzing the site continually for any errors. 

Now i know IE is a killer for most websites and it probably looks strange looking at our site (banknerd.ca) through IE. Though, I'm not going to blame the errors on someone else. I'll get the site fixed right away for IE, hopefully you'll stay longer next time .

If you can send a screen shot to [email protected]. I'll definitely have the issues resolved. I haven't heard any other users having the same issues, but then again they might not be sharing that with us.


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## humble_pie (Jun 7, 2009)

hello guru

i'll be happy to send you a screen shot & also check out banknerd dot ca on another computer ... but it might take a while ... it's tax time, spring house repairs time, losing-an-hour time ...

all signs are that you're aiming to offer a quality service at bn dot ca so i'd like to support your website


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