Retailers demand credit relief

Canadian shoppers who use credit cards may soon find themselves slapped with extra fees, if retailers win a fight against being stuck with transaction charges from Visa and MasterCard. Retail organizations renewed their calls Tuesday for Ottawa to loosen credit card regulations following a landmark ruling south of the border that could have implications for a case that will be decided by a federal tribunal later this year.

TORONTO — Canadian shoppers who use credit cards may soon find themselves slapped with extra fees, if retailers win a fight against being stuck with transaction charges from Visa and MasterCard.

Retail organizations renewed their calls Tuesday for Ottawa to loosen credit card regulations following a landmark ruling south of the border that could have implications for a case that will be decided by a federal tribunal later this year.

The Canadian Federation of Independent Business, which has more than 100,000 member businesses across Canada, is calling for changes to the federally regulated code of conduct that would allow retailers more rights, including the ability to make credit card users pay a surcharge or refuse credit cards at their stores.

If successful, their campaign would settle a gripe between retailers and credit card operators, and allow merchants the freedom to either accept or deny certain credit cards at their registers.

“Merchants have had a 30 per cent increase in their costs in the last two years because of premium (credit) cards,” said Dan Kelly, the president and CEO of the CFIB in an interview.

“Those additional costs are finding their way into their service. Consumers are paying these fees already, and they’re going up.”

The CFIB wants merchants to have the ability to add surcharges on credit card users that would counteract the transaction fees charged by some credit card companies.

Currently Visa and MasterCard rules state that merchants cannot levy any surcharges on credit card users, forcing retailers to absorb the cost of usage themselves.

Those fees — ranging from 1.5 to 3.0 per cent of the value of customer purchases — are slightly below the U.S. average.

The issue has been of concern to the Competition Bureau, which argued in May that restrictive contracts put in place by Visa and MasterCard allow the two credit card companies to essentially dictate terms to merchants.

The tribunal has the power to force credit card companies to change their method of operations, but it cannot levy a monetary penalty in the case.

Last week, a landmark settlement in the United States between Visa, MasterCard and merchants thrust the debate back into the spotlight in Canada.

The two credit card companies, as well as several major banks, reached an agreement to pay U.S. retailers at least US$6 billion to settle a long-running lawsuit that alleged the card issuers conspired to fix the fees that stores pay to accept credit cards. The dispute stretched back to 2005.

MasterCard Canada defended its current fee structure as part of its “commitment to consumer protection.”

“MasterCard Inc.’s agreement to settle U.S. merchant litigation is strictly a U.S. matter and has no bearing on the Canadian market,” said spokeswoman Deborah Rowe in an emailed statement.

Visa Canada said it believes it presented a strong case at the Competition Tribunal hearing, and believes that credit cards without surcharges should be allowed and “preserve consumer choice at checkout and ensure cardholders are not penalized for using their preferred form of payment.”

Under last week’s settlement, the U.S. merchants will be allowed to charge their customers more if they pay with credit cards.

“It’s further recognition of the imbalance in the payments industry particularly around credit cards,” said David Wilkes, senior vice president of the Retail Council of Canada.

“There is going to have to be protections built into the code of conduct to ensure the retailer has the ability to manage and control their costs,” he added.

The ruling has caused some concern that if the regulations are similarly changed in Canada, shoppers could be stuck with extra fees if they choose to pay with their credit cards.

That possibility concerns Laurie Campbell, the chief executive of Credit Canada, a credit counselling service.

“I worry about those individuals that are carrying balances, that may need to use their credit cards,” she said. “They’re living from one paycheque to the next. It’s just going to hit them even more. They need the break, they don’t need the transaction fees.”

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Canopy Growth Corp. will deepen its U.S. presence by launching four sparkling cannabidiol waters, shown in a handout photo, there before possible federal legalization. THE CANADIAN PRESS/HO-Canopy Growth
Canopy Growth launches first CBD drinks in U.S. as legalization talk intensifies

Quatreau sparkling waters will be sold through e-commerce

A nurse assistant prepares a dose of the Oxford-AstraZeneca vaccine for COVID-19 during a priority vaccination program for health workers at a community medical center in Sao Paulo, Brazil, Wednesday, Feb. 3, 2021. THE CANADIAN PRESS/AP-Andre Penner
Oxford-AstraZeneca vaccine for COVID-19 needs better promotion: experts

National Advisory Committee on Immunization makes recommendations

A man receives his COVID-19 vaccine at a clinic at Olympic Stadium marking the beginning of mass vaccination in the Province of Quebec based on age in Montreal, on Monday, March 1, 2021. THE CANADIAN PRESS/Paul Chiasson
Most Canadians confident federal vaccine rollout is back on track: poll

Fifty-six per cent of respondents confident in vaccine supply

Air Transat and Air Canada aircraft are seen on the tarmac at Montreal-Trudeau International Airport in Montreal, on Wednesday, April 8, 2020. THE CANADIAN PRESS/Paul Chiasson
International air travel a fraction of pre-pandemic times

International air travel during pandemic less than a 10th of what it was before COVID-19

Red Deer dogs Bunsen and Beaker helped save a missing pet recently. The two dogs have more than 80,000 followers on Twitter. (Contributed photo)
WATCH: Red Deer science dogs help save lost pet

Red Deer science-communicating dogs Bunsen and Beaker helped rescue a missing pet… Continue reading

Treena Mielke
From record player to CD

When I first began dating my husband, he drove a little old… Continue reading

Opinion
Ottawa banks on Big Pharma making Canada pandemic-proof

Liberal fireball François-Philippe Champagne may be brand new to his portfolio as… Continue reading

Dr. W. Gifford-Jones
Health: Keep blood pressure under control

Eleanor Roosevelt once said, “You must do the things you think you… Continue reading

Edmonton Oilers' Kailer Yamamoto (56) and Toronto Maple Leafs' Morgan Rielly (44) reach for the rebound from Leafs goalie Michael Hutchinson (30) during second-period NHL action in Edmonton on Monday, March 1, 2021.THE CANADIAN PRESS/Jason Franson
Michael Hutchinson earns 31-save shutout, Maple Leafs blank Oilers 3-0

Michael Hutchinson earns 31-save shutout, Maple Leafs blank Oilers 3-0

Washington Nationals' Ryan Zimmerman watches his solo home run during the third inning of a spring training baseball game against the Houston Astros Monday, March 1, 2021, in West Palm Beach, Fla. (AP Photo/Jeff Roberson)
In-game video returning to baseball for 2021

In-game video returning to baseball for 2021

Winnipeg Jets' Nathan Beaulieu (88) clears the puck in front of goaltender Connor Hellebuyck (37) as Vancouver Canucks' Elias Pettersson (40) looks for the rebound during second-period NHL action in Winnipeg on Monday March 1, 2021. THE CANADIAN PRESS/Fred Greenslade
Three first-period goals pace Vancouver Canucks to 4-0 victory over Winnipeg Jets

Three first-period goals pace Vancouver Canucks to 4-0 victory over Winnipeg Jets

Rugby training gear is shown during a Torotno Wolfpack during a practice at Lamport Stadium in Toronto. Bradford, Featherstone, Leigh, London,  THE CANADIAN PRESS/Neil Davidson
Plans announced to create a grassroots Canadian rugby league co-op

Plans announced to create a grassroots Canadian rugby league co-op

Ottawa Senators left wing Brady Tkachuk (7) and centre Chris Tierney (71) get sandwiched between Flames defencemen Rasmus Andersson (4) and Juuso Valimaki (6) during second-period NHL action in Ottawa on Monday, March 1, 2021. THE CANADIAN PRESS/Sean Kilpatrick
Batherson scores twice for Ottawa Senators in 5-1 win over Calgary Flames

Batherson scores twice for Ottawa Senators in 5-1 win over Calgary Flames

Most Read