The impact of credit card transactions, also known as swipe fees, is significant for both merchants and consumers. Merchants are required to pay a fee ranging from 2% to 4% each time a customer uses a credit card, making it one of their major business expenses. This cost is often transferred to consumers through increased prices for goods and services.
This situation particularly affects small merchants who lack the bargaining power to negotiate better rates, compelling them to raise their prices to cover these fees. However, potential relief could come from legislative measures such as the Credit Card Competition Act (CCCA), which aims to open up the market by allowing other networks to process transactions.