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A customer uses a credit card at a terminal as he shops in a Lidl supermarket in Gattieres near Nice, France, on Dec. 2.ERIC GAILLARD/Reuters

Most Canadians would respond negatively to a store that charged them an extra fee for paying with a credit card, a new poll suggests.

The online survey of 2,774 Canadians, conducted by the Angus Reid Institute from Nov. 28 to 30, found that just one in 10 respondents said they would accept a surcharge for paying by credit card. The rest would either switch to a different form of payment, such as cash, or stop shopping at that business all together.

Credit cards have become the most common form of payment in recent years, and their use has skyrocketed during the COVID-19 pandemic. But most merchants privately complain about processing credit-card payments because they come with the highest processing fees.

Stores recently won the ability to pass on those processing fees to customers because of a legal settlement, but so far, few businesses have publicly said they would so because they are concerned that it could lead to consumer backlash.

Respondents of the Angus Reid Institute poll expressed a little more sympathy toward small businesses than large retailers. If a small store added a surcharge for credit-card payments, 59 per cent of respondents said they would switch to a different payment method, and only 28 per cent would stop going to that store. If confronted with a surcharge at a large retailer, airline or telecommunications company, however, respondents said they were about equally likely to switch payments (46 per cent) as they were to stop shopping at that business (44 per cent).

Shachi Kurl, president of Angus Reid Institute, said credit-card users would clearly dislike having to pay an extra fee, but they appear to be more understanding about why a small business would have to charge it.

“It’s a recognition of the perception that small, family-owned businesses or entrepreneurial enterprises are far less able to absorb the costs downloaded onto them for processing credit-card payments than big retailers,” Ms. Kurl said.

The bulk of credit-card transaction fees go to the financial institutions that issue the cards, and the revenue is used to fund loyalty programs – especially for higher-end cards.

A Bank of Canada research paper published in March found that people who had higher incomes and larger expenditures were more likely to use credit cards than other forms of payments. The researchers attributed that preference to loyalty programs that rewarded cardholders for making their purchases with credit cards.

The Angus Reid Institute survey found that respondents who reported higher incomes were more likely to use credit cards. For example, 64 per cent of those who reported annual incomes of over $200,000 said they used credit cards “as much as possible,” whereas only 25 per cent of those who earned less than $25,000 said the same.

The higher-income respondents also showed the most sensitivity to being charged a processing fee by merchants: 73 per cent said they would give up their rewards programs if they had to pay an extra 1.5 per cent with every credit-card purchase.

“While higher income-earning Canadians are no doubt better equipped to absorb the extra cost than lower income earners, it does not mean that higher income earners see such fees as a reasonable expense they wish to absorb,” Ms. Kurl said. “Canadian consumers, regardless of income level, reject costs that they do not perceive to offer them value for their dollars spent.”

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