It appears that Telus Corporation (TSX: T) is unhappy with the $1.7 billion in net income it posted in 2021, despite that figure being an increase of just under 35% from its net income reported in 2020. The major Canadian telecom on Monday filed an application with the CRTC that effectively seeks to increase those bottom line figures, via the introduction of a proposed credit card processing fee.
The telecom is currently seeking approval to amend its general tariff terms as they relate to a customers responsibility for charges. The firm is looking to add a 1.5% payment processing fee to transactions conducted via credit cards, with the charge to apply to both new and existing customers.
The proposal is based on a class action lawsuit that occurred in 2018 against Visa, Mastercard and National Bank, that ultimately resulted in the two major credit card providers, Visa and Mastercard, agreeing to modify no-surcharge rules. Those changes, which come into effect on October 6, 2022, will enable merchants to surcharge customers up to a capped figure.
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Telus meanwhile is proposing implementing the 1.5% fee as of October 17, 2022.
What’s more, is the surcharge is intended to apply to the whole figure of the bill, including taxes – with tax then being applied to the surcharge as well. Within the filing, Telus provides an example of the surcharge fee and how it would impact a typical consumer in Alberta with a $100 monthly telecom bill.
A standard bill, priced at $100, in the province of Alberta would see 5% GST added, resulting in a bill for $105. With the new proposed fee, at 1.5%, the fee would amount to $1.58, plus an additional $0.08 in GST, resulting in a total bill of $106.66 if processed via credit card.
While Telus may be the telecommunications firm applying for the modification, if approved, consumers can likely expect other telecom providers within the oligopoly in Canada to follow suit, rather than leave “free money” on the table.
Advanced notice is expected to be provided to Telus customers on the changes starting later this month.
Telus Corporation last traded at $29.40 on the TSX, with a market valuation of $40.36 billion.
Information for this briefing was found via the CRTC and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
