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The benefits of accepting foreign debit cards
June 13, 2012 - 1:01pm
The ability for businesses around the Canada-U.S. border to process transactions of customers from the other country can help them increase profits. At the northern tip of Washington, for example, an increasing number of merchants have begun accepting Canadian debit cards in an attempt to lure some of the country's shoppers, according to the CBC.
The chamber of commerce for the city of Bellingham-Whatcom, Washington, has initiated the Canadian Certified program, which will extend the number of stores who can accept the cards, the news source reports.
"We continue to make changes so that [Canadians] can do a number of different things," chamber president Ken Oplinger told the source. "In this case, they can go and shop using their preferred form [of] payment."
By expanding payment processing options, resourceful businesses can expand their customer pools. Merchants in Canada could likewise adopt the technique to encourage American tourists to shop more at local stores. Credit card processing merchants in Canada who accept American debit cards could find that they have many more cross-border shoppers.
This could be welcome information for Canadian retailers who fear they are losing shoppers across the border. Recent data from Statistics Canada estimated that around 4 percent of Canadian consumer dollars are spent in American stores, according to The Globe and Mail. With recent duty-free rule changes that expand the amount citizens can bring back home with them, some are worried that this number could go even higher.
"This is bad news for retailers," David Wilkes, senior vice-president of the Retail Council of Canada told the news source. Keeping prices and offering more convenient transactions could help keep business within the borders.
By expanding point of sale options to encourage Canadian shoppers to keep their money in the country as well as make it easier for Americans to shop here, could help prevent this situation from worsening. Likewise, ensuring that customers feel like they are getting a good deal - either by keeping prices low or allowing customers to earn rewards from using their credit cards - might help Canadian businesses remain profitable.
In the face of losing business to American retailers, broadening the capabilities of pos terminals to make transactions simpler for Canadians and tourists alike could help keep merchants' profits high.