TORONTO — Visa Canada’s plan to increase credit-card fees by one-third in April is causing concern in the foodservice industry.
Now, the Canadian Federation of Independent Business and the Canadian Restaurant and Foodservices Association (CRFA) is speaking out against the increase.
“It is unconscionable for the payment industry to make as much off of a restaurant transaction as the restaurateur who creates local jobs and invests in his or her community,” writes Garth Whyte, president and CEO of the CRFA, in an open letter to Visa’s Jim Allhusen, president and country manager. “Adding insult to injury, the upcoming rate increases come at a time when Visa earnings have repeatedly surpassed expectations.”
According to the letter, the average full-service restaurant in Canada generates 3.7 per cent in pre-tax profits, while the cost of accepting some credit cards can be up to three per cent of the total bill, plus the credit-card fee on tax and tip.
Meanwhile, Visa is defending the fee hike. “Ongoing investment is required in our network to ensure the exceptional reliability, speed, innovation and security that consumers, merchants and issuers have come to rely on,” reads a statement emailed to CBC News
Visa is also planning to introduce an “über-premium” credit card in the fall of 2013. It is reported to have high transaction fees for merchants, according to the Financial Post. Fees to process foreign-issued cards are also set to rise in April.