Credit card

Federal authorities still planning to act on credit card fees


OTTAWA –
The Department of Finance said the federal government has not abandoned the Liberal commitment to lower the fees merchants pay every time a buyer pays with a credit card.

The Liberals promised in the spring budget to consult on the proposed changes, which they did over the summer.

Finance Minister Chrystia Freeland was supposed to outline next steps, including the legislative changes needed to regulate fees, in her economic update earlier this month.

But the update didn’t mention the merchant fees.

Freeland’s department said it was continuing to engage with everyone affected by any changes and that any updates “will be provided in due course.”

Business associations said they were seeking federal action to ease costs for already strained small and medium-sized businesses, and hoped the fee-cutting plan would not bring down the government’s program.

The Liberals promised to cut fees during the 2019 election campaign, but the pandemic appears to have sidelined plans like so many other federal priorities.

After the Liberals made a budget commitment to get things done, Freeland approved a pre-summer consultation plan that was presented to him in a briefing note.

This memo, obtained by The Canadian Press under the Access to Information Act, traced the history of the problem and how the government had previously obtained that Visa and Mastercard voluntarily reduce their interchange rates, first. in 2015 and again in May.

Typically, rates range from about one percent to just under three percent of the value of a purchase.

The actual amount is determined by several factors including the industry of the merchant, whether the purchase was made in store or online, and the type of card used with premium cards charging higher fees. All of these fees help credit card issuers like banks cover costs, but also improve bottom lines.

“Credit cards are very profitable and further reductions in interchange rates will likely have a negative impact on issuer revenues,” officials wrote in a June presentation, attached to Freeland’s briefing note.

Costs to merchants have jumped during the pandemic as more people use credit cards for online purchases, and even small in-store purchases that would previously have used cash as a drink and a drink. snack.

Anne Kothawala, president and CEO of the Convenience Industry Council of Canada, said paying fees has become much more difficult because of the pandemic as more customers pay with plastic even though revenues are falling. lagging behind.

“We have long argued that banks should not be able to impose their costs on convenience stores and other small businesses,” Kothawala said.

“One of the most important ways for the federal government to help businesses that have been affected by the pandemic is to significantly protect retailers from this total imbalance of power. “

Kothawala also said she believes fee reductions should be legislated, fully transparent and consistent in their application so that different players in the system do not have the opportunity to pass the extra costs on to small businesses.

Karl Littler, senior vice president of public affairs for the Retail Council of Canada, estimated the cost to merchants to be around $ 10 billion, up from about $ 7 billion before the pandemic.

Littler said he still expects the government to act sometime in 2022, and suggested that part of the delay could be due to the Liberals looking into whether the voluntary model used previously is still fit for use now.

“I believe they will reduce it. I don’t think it will drag on for three or four years, ”he said.

This report by The Canadian Press was first published on December 24, 2021.

jQuery (document) .ready (function () {window.fbAsyncInit = function () {FB.init ({appId: ‘404047912964744’, // App ID channelUrl: ‘https://static.ctvnews.ca/bellmedia/common /channel.html ‘, // Channel file state: true, // check the connection state cookie: true, // enable cookies to allow the server to access the xfbml: true session // parse XFBML }); FB.Event.subscribe (“edge.create”, function (response) {Tracking.trackSocial (‘facebook_like_btn_click’);});

// START: Facebook clicks on the different button FB.Event.subscribe (“edge.remove”, function (response) {Tracking.trackSocial (‘facebook_unlike_btn_click’);}); };

var plusoneOmnitureTrack = function () {$ (function () {Tracking.trackSocial (‘google_plus_one_btn’);})} var facebookCallback = null; requireDependency (‘https://connect.facebook.net/en_US/all.js#xfbml=1&appId=404047912964744’, facebookCallback, ‘facebook-jssdk’); });

jQuery (document) .ready (function () {window.fbAsyncInit = function () {FB.init ({appId: ‘404047912964744’, // App ID channelUrl: ‘https://static.ctvnews.ca/bellmedia/common /channel.html ‘, // Channel file state: true, // check the connection state cookie: true, // enable cookies to allow the server to access the xfbml: true session // parse XFBML }); FB.Event.subscribe (“edge.create”, function (response) {Tracking.trackSocial (‘facebook_like_btn_click’);});

// START: Facebook clicks on the different button FB.Event.subscribe (“edge.remove”, function (response) {Tracking.trackSocial (‘facebook_unlike_btn_click’);}); };

var plusoneOmnitureTrack = function () {$ (function () {Tracking.trackSocial (‘google_plus_one_btn’);})} var facebookCallback = null; requireDependency (‘https://connect.facebook.net/en_US/all.js#xfbml=1&appId=404047912964744’, facebookCallback, ‘facebook-jssdk’); });

Disclaimer! NewsConcerns is an automatic aggregator of all media in the world. In each content, the hyperlink to the main source is specified. All trademarks are the property of their rightful owners, all documents are the property of their authors. If you are the content owner and do not want us to publish your materials, please contact us by email – [email protected]. Content will be removed within 24 hours.