As you "charge" your way through the malls this weekend, think about this: Every time a merchant swipes your credit card it costs about 2 per cent of the value of the purchase.

That's $2 on every $100 worth of goods or services.

To the customer, this little expense is invisible. It isn't added at the cash register. Instead, like heat and hydro and other costs of doing business, it's buried in the overall price of the merchandise, whether you buy with a card or cash.

It might not sound like a very high price to pay for all the convenience, rewards and financial flexibility credit cards offer both consumers and merchants.

But some Canadian retailers say credit card fees now take $4.5 billion a year out of their pockets, and they're spiralling out of control. With two very large multinational companies, Visa and MasterCard, dominating the card market, retailers say it can only get worse unless government intervenes.

"We don't disagree that credit cards are useful means of payment. Customers love them. They are a reasonably effective and efficient way of paying for goods. Our main concern is that they're exorbitantly expensive," said Peter Woolford, vice-president of policy development and research at RCC.

The credit card companies say the rates are reasonable for all the benefits the cards deliver both to merchants and consumers, and that retailers are trying to make a "cash grab" that won't result in lower prices at the till.

They emphasize that the card companies themselves don't make a cent from the so-called "interchange" fee that underpins the transaction between cardholder and merchant.

All the card companies do is set the interchange rate, which is spilt between the merchant's bank and the cardholder's bank during the process of approving a transaction. The card companies say they make their money charging the banks other fees for things like transaction volume and consulting services.

In credit card parlance, the banks that sign up the merchant are called "acquirers" and the ones that sign up the consumers are "issuers."

Visa says the interchange rate is designed to balance the interests of both issuers and acquirers to ensure there are enough cards in consumers' hands that merchants will want to accept them, and enough merchants that take cards to make it attractive to consumers to use them.

"The idea that we'd stick it to the merchants is silly. The more merchants we have the more valuable we are to consumers," said Kevin Stanton, president of MasterCard Canada.

They also say interchange is just one portion of the fee merchants pay to process the cards. But merchants say the interchange rate makes up 80 per cent of the fee they're charged by their banks.

The credit card companies say the new rate structure replaced a single rate for all transactions with one that varies by type of merchandise, volume, risk and other factors.

The previous single rate structure eliminated very big and very small transactions from the market, they said.

While the "overall effective rate" remains the same, at roughly 1.58 per cent, Visa's head of strategy and interchange, Brian Weiner, agrees that some rates went down while others went up.

The retail council says gas and grocery retailers got a break at other retailers' expense.

Weiner denies that's the case. "The rates for gas and grocery are lower than some of the other rates in the system. Because they are lower doesn't mean the other rates are higher."

The retail council says the whole setup leaves the merchant, who foots the bill, out of the equation.

"The folks that really profit on this first and foremost are the issuing financial institutions," Woolford said.

But interchange rates are just part of the problem, the retailers say. Over the past year, the card companies have introduced super-premium cards that provide cardholders with more benefits, but cost merchants even more to process.

The result is the average cost to the merchant of processing a credit card has jumped to 2 per cent, from 1.7 per cent, the retail council says.

The credit card companies say they introduced the cards to gain a greater share of the biggest spenders in the market.

Woolford said retailers initially believed only a small percentage of consumers would qualify for the cards, but they now think they make up as much as 25 per cent of the market.

The credit card companies defend their decision to set higher interchange rates for these cards, saying consumers who carry them are more valuable to the merchant.

But Woolford isn't buying that argument.

"Having a different card isn't going to make a difference to how much they spend in my store," he said. "They're still a $40,000-a-year customer. It doesn't give them any more incentive to shop in my store versus my competitor's. There's no benefit to me as a retailer."

The retailers' biggest fear, however, is what will happen to Canada's low-cost debit card network now that the big multinational credit card companies are publicly traded, profit driven enterprises.

When a customers pays with a credit card, its costs the merchants on average $2 for every $100 purchase.

Debit cards cost just 6.6 cents per $100 to process, the retail council says.

There's growing evidence the credit card companies want to get a bigger share of Canada's debit market, says Mark O'Connell, president and chief executive officer of the Interac Association, Canada's debit card network.

Indeed, in many countries around the world, Visa and MasterCard offer customers a choice of credit and debit products.

Until recently, the structure of the credit card industry in Canada effectively prevented them from entering the debit market. Created as associations owned by their members, mainly the banks, their governance rules restricted what they could offer.

Now that the association model has been disbanded, and both companies have raised "war chests" through public offerings on the stock market, O'Connell said Visa and MasterCard are aggressively pursuing both debit and credit markets around the globe.

"If we are left in this market with only two U.S.-based card markets for merchants and consumers in terms of access to their own money, it's not going to be a healthy marketplace," O'Connell said.

Interac is fighting back by looking at making a similar move to non-association ownership that unties its hands.

"We recognize we need to change so we can compete in this marketplace," he said.

Interac hasn't launched a major new product in 16 years, O'Connell says, while the credit card companies are introducing mobile payment systems and contactless cards, while pushing for regulatory changes that would allow Canadian banks to issue more than one brand of card.

Retailers want the federal government to get involved. They point to the model in Australia, where they say interchange fees have fallen to 0.5 per cent.