Telus Reiterates 1.5% Credit Card Processing Fee Coming in October

telus credit card processing fee

Last month, Telus proposed to the Canadian Radio-television and Telecommunications Commission (CRTC) its plan to introduce a 1.5% credit card processing fee, when customers opt to pay bills with credit cards.

At the time, Telus noted its 1.5% fee would begin in October and now, it appears this will come to fruition as the company previously stated.

Telus today sent out emails to customers explaining and reiterating the 1.5% fee, according to copies obtained by iPhone in Canada.

“As a valued Telus customer, we’d like to keep you informed of upcoming changes to your mobility account,” reads the email from Telus.

We’ve reached out to Telus to confirm whether the CRTC has approved their request yet or not. It seems the company is confident the fee request will be approved.

Telus says starting October 17, 2022, customers that “choose to make a bill payment with a credit card will be charged a 1.5% Credit Card Processing Fee (plus tax).” This fee applies to one-time and pre-authorized credit card bill payments. Telus says it is not higher than the fee it pays to accept credit card payments.

How much will this new 1.5% credit card processing fee cost you? Telus provides the following example: “For example, if a customer in Ontario is making a $100 bill payment, the 1.5% Credit Card Processing Fee would equal $1.50, plus 13% HST of $0.20, for a total of $1.70.”

The Telus customer received the email because they are currently set up for pre-authorized credit card payments.

Telus says to consider “using alternative payment options” to avoid the Credit Card Processing Fee, including one-time payments at your bank, recurring bank payments through pre-authorized debit, or Visa Debit, Visa Prepaid and Mastercard Prepaid.

Telus Says Debit Payments Have ‘Advantages’ Over Credit Cards

Telus says by switching to pre-authorized debit from your bank account includes “advantages”, such as avoiding credit card interest rates and processing fees, the ability to pause your pre-authorized debit payment prior to the withdrawal date, and never incurring late payment charges or collections treatment due to an invalid credit card. Sounds like it could be scary if you’re not using pre-authorized debit, right?!

If I was a Telus customer, I’d gladly pay the 1.5% credit card processing fee to leverage the power of chargebacks, if the company messes up your bill. Paying through pre-authorized debit means money comes straight out of your bank account, and that can be next to impossible to recover once it’s gone.

Telus says prepaid accounts and all customers in Quebec are excluded from its new Credit Card Processing Fee.

Last month, Telus told iPhone in Canada in a statement, “this fee helps us recover a portion of the processing costs we incur to accept credit card payments, and the average cost will be around $2 for most customers.”

Interestingly enough, the Telus email appears to have an incomplete title, as it still uses what appears to be a default title template, reading “lorem ipsum dolor sit amet.”

If the CRTC has indeed approved this credit card processing fee, it remains to be seen if Telus rivals Rogers and Bell will try to implement their own fee as well.

Telus Fee to Come After Change in Credit Card Surcharge Rules

The Telus plan to implement a credit card processing fee appears to start just after changes to no surcharge rules are expected to kick in, possibly as early as October 6. Back in 2018, a class-action lawsuit targeted Visa and Mastercard over credit card processing fees. Both companies settled, essentially paving the way for merchants to charge consumers a credit card processing fee.

“As of Oct. 6, 2022, Canadian merchants will be allowed to surcharge Mastercard credit card transactions, providing them with the flexibility to operate their businesses based on what best suits their needs,” said senior vice president of communications at Mastercard, Will O’Connor, to BNN Bloomberg on September 9.

In the European Union, credit card processing fees are capped at 0.3 per cent; Telus is opting for 1.5% which is being called as too high, according to Ambarish Chandra, a professor of economic analysis and policy at the University of Toronto.

John Lawford, the executive director and general counsel of PIAC, told BNN Bloomberg, “I think it’s going to be a bit of a wild west, we are going to see some experimentation,” in regards to coming credit card processing fees, adding there is “nobody really in charge” when it comes to overseeing the implementation of fees on consumers.