Visa and Mastercard are American companies, and they essentially tax everybody by taking a percentage of purchase prices for themselves. Not exactly a small percentage either, 1.2% to 2.65%. Ever wonder why so many merchants say they don’t accept American Express? That’s because they charge quite a bit more to merchantes, 50% more than Visa or Mastercard. Anyway, we’re letting American companies tax us and we love them because we get rewards when we use cards. But it’s just a shell game because we pay more up front because businesses need to charge more to make up for payment processing charges. They get to sit in the middle and rake in the money.
Now the alternative in Canada is Interac. Interac charges a set amount per transcation. How much? 2 to 5.5 cents. Unless you’re going through Apple or Google Pay, and then it’s a percentage again.
Interac is also Canadian.
Want to stick it to Trump? Stop using credit cards (and Google Pay or Apple Pay) and switch to Interac. Want to make Canada better? Stop using credit cards and switch to Interac. Is it going to be inconvenient? Yes. Online shopping will be much harder but I have seen online Interac payments before and we can ask our favourite Canadian merchants to accept Interac online.
Ahh, so as an American my only option is cash. 😔
I don’t have much experience with American cards. I know debit cards are more common down there. Do they have the same merchant fees?
Cash is better for privacy too. Don’t be paying for that abortion, gun, or donation to environmental cause in this climate with Visa.
Not denying that. Most card purchases my family has is for groceries or clothing anyways.
A book here and there.
This is a brilliant strategy. Thank you for sharing that.
Just like tipping, a percentage system makes no sense. It’s the exact same work to bring me a $50 meal vs a $500 one. And for payment processing, a flat fee makes much more sense because there’s no difference in processing a $100 transaction vs a $10,000 one.
So why does a percentage-based system persist? Because workers want higher wages (understandable when restaurants refuse to pay them more and expect the customer to pay part of their income). And for giant corporations like Visa and MasterCard, it’s literally never enough for them. They can make more money, so that’s the only reason. It’s so dumb…
Ah, but it’s a credit card, emphasis on credit. The bank issuing the card is making a short term loan that will either get paid off by the card holder at the next billing cycle, or will automatically turn into an indefinite length loan at what is usually an exorbitant interest rate.
The bank is always taking a risk that they won’t get paid. That’s why the amount they get paid for this risk needs to scale with the size of the transaction.
Debit card doesn’t have this specific risk; the money is either immediately transferred from the cardholder’s account or the transaction is declined.
What happens if your card is Interac and Visa debit?
Good question! I suppose the merchant can use either system with your card.
Visa and Mastercard are American companies, and they essentially tax everybody
This is what crypto was made for. No more censorship by toxic duopoly.
There is a long road before we make crypto friendly for small Internet transactions for the general public. Interac is 80% there already. 5 % of the job is having Internet infrastructure accept Interac and big players like Shopify can make it work in a heartbeat. Transactions outside of Canada won’t support Interac for the foreseeable future. The last 15 % is a law, in Canada, that protect fraudulent transactions up to 75$ / the ability to reverse a charge if you don’t get what you payed for.
Any suggestions and ideas should be aimed at solving the second problem. An incomplete fix would be a dedicated account that your bank won’t connect to your main account outside of your self initiated transfers. Having the ability to reverse a transaction and some level of fraud insurance will involve higher fees. Canadian banks can make Interac as attractive as Visa if they want, but only for domestic transactions.
