OTTAWA — The NDP has called on the federal government to prevent credit-card companies from charging businesses higher fees for using premium cards.
“The rising costs associated with processing credit-card payments continues to hinder the competitiveness of Canadian business, from point-of-sale to online transactions,” said Glenn Thibeault, NDP Consumer Protection critic. “Ultimately this results in reduced profit margins for merchants and higher retail costs for consumers.”
According to the Canadian Press, the pressure is due to an upcoming ruling on whether Visa and MasterCard are engaging in anti-competitive behaviour. A decision from the Competition Tribunal could allow businesses, including foodservice operators, to add surcharges for accepting credit cards or allow them to refuse to accept certain higher-cost cards.
Visa Canada’s plan to increase credit-card fees by one-third in April has already been causing concern in the foodservice industry, prompting the Canadian Federation of Independent Business and the Canadian Restaurant and Foodservices Association (CRFA) to speak out against the increasing fees.
According to an open letter written by Garth Whyte, president and CEO of the CRFA, 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.
According to the Financial Post, Visa and MasterCard hold the majority of the credit-card market in Canada. Visa is also planning to introduce an “über-premium” credit card in the fall.
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