Skyscraper Ad

Sign -Driving Miss Daisy

Signature Ad

Signature - McCullough

Sky-Lkd Reg Cons Auth

Faculty of Education Teaching English as a Second Language

News
Click here to see more
Subscribe
Community Calendar
Click here for full listings.
Poll
Support appears to be growing for a national inquiry into missing and murdered aboriginal women. Do you support holding an inquiry?



Total Votes: 429
View Results Past Polls
User Submitted Photo Gallery
Submit Your Own Photos
2013-01-21 at 14:54

Opposition calls on PM to curb cost of credit cards to small business

By Terry Pedwell, The Canadian Press
Need Xtra Cash? Visit Xtra Cash! Payday advances, cheque cashing with best rates, no holds & instant cash! Only at XTRA CASH! On Dawson & Frederica Click here for full details

OTTAWA - The federal Opposition on Monday called on the Harper government to stop credit card companies from charging businesses higher fees for using premium cards.

The call came as a federal competition tribunal prepared to rule on whether Visa and MasterCard are engaging in anti-competitive behaviour.

Small business groups hope the tribunal will recommend that Ottawa forbid the major credit card companies from forcing retailers to accept cards that carry higher payment processing fees.

The high cost of processing credit card payments is hurting businesses, said Glenn Thibeault, the NDP consumer protection critic.

"Ultimately this results in reduced profit margins for merchants and higher retail costs for consumers," he said in a statement.

Canadian companies already pay the highest credit card processing fees in the industrialized world, although Canadians enjoy some of the lowest debit fees among G20 nations.

In 2010, the Harper government introduced a voluntary code aimed at protecting small business from abusive practices by credit card companies.

The code is designed to protect small businesses, said Kathleen Perchaluk, Finance Minister Jim Flaherty's press secretary.

"Credit and debit card providers must give small businesses and merchants clear information regarding fees and rates and the ability to cancel contracts without penalty should fees rise or new fees be introduced," she said, while noting that the NDP voted against the code.

But voluntary codes don't work and mandatory measures are needed, said Thibeault.

"While governments around the world have regulated the costs of credit card swipe fees, the Conservatives’ self-regulatory approach has failed Canadian merchants," said Thibeault.

"Enough is enough; the Conservatives need to act now."

Thibeault is starting a cross-country consultation with business and community groups this week to hear their concerns about the fees.

The Canadian Federation of Independent Business says shopkeepers and others who accept credit and debit cards as payment should be given the right to refuse high-cost cards or to add limited surcharges.

The federation, with more than 100,000 members, also argues that Canada's code of conduct needs provisions for mobile payment methods, such as by cellphone.

The tribunal ruling was expected earlier this month but has not yet been made public. A spokesman for the tribunal said it's not known when that decision will be released.

A ruling forbidding credit card companies from forcing businesses to accept all types of cards would benefit merchants by allowing them the freedom to either accept or deny certain credit cards at their registers. But it could also mean confusion for consumers or translate into surcharges at the retail level, especially for Canadians who prefer to pay with credit cards that give them travel and other incentive points.

Under an out-of-court settlement of a long-running legal dispute south of the border, reached last summer, U.S. merchants can now charge their customers more if they pay with credit cards.

The settlement also saw Visa, MasterCard and major U.S. banks agree to pay retailers in the United States at least US$6 billion.

The lawsuit, filed in 2005, alleged that the major credit card issuers conspired to fix the fees that stores pay to accept their cards. Similar allegations have been made in Canada.

Visa and MasterCard hold about 92 per cent of the credit card market in Canada. It's estimated that the fees they charge businesses to use their cards add up to about $5 billion annually.


 

The Canadian Press
© The Canadian Press, 2014

Click here to report a typo or error

Tbnewswatch.com(0)

Banner/Vector Construction

Comments

We've improved our comment system.
Comments for this story are semi-moderated. Read our comment guideline.

Add a new comment.
You must log in to add comments.
Create a new account
Forgot password?
Log In