Senator Wants Merchants Protected From Credit Card Fees
Senator Pierrette Ringuette is taking aim at the credit card companies that gouge merchants every time Canadians buy a cup of coffee or a pair of running shoes with their credit cards.
The senator wants to put a cap on credit card acceptance fees that retailers are charged so that customers can pay with credit cards.
The fees have climbed in recent years as credit card companies issue premium cards that offer cash back or travel rewards with every purchase.
In effect, those rewards are actually paid for by the retailers and restaurants where the credit cards are used, a cost that forces them to increase prices which ends up penalizing people who pay by cash or debit.
Ringuette’ s bill, S-202, will be studied in committee this spring. The bill would amend the Payment Card Networks Act that regulates the fees credit card companies can charge merchants.
Retailers have long complained about the fees, and the Canadian Federation of Independent Businesses has a campaign to help raise awareness about the issue. The campaign includes signs that merchants can post in their stores so that consumers are aware of the cost of the credit cards.
Fees reach up to three percent of the transaction total presently. Ringuette wants to cap that at 0.5 percent for standard transactions. The bill follows similar laws in Australia.
Credit card companies say the caps distort the market and lead to higher annual fees and reduced loyalty programs. Supporters say they lower average prices at the till.
“I have tabled bill after bill, one every session, since 2008 to limit excessive merchant fees and finally we are moving forward. These fees cost Canadian merchants and consumers over $5 billion annually, which is over $30 billion since I first pushed for action” said Ringuette.
“This is harming Canadian businesses and consumers, costing us upwards of $18 million a day.”