Ottawa urged to curb credit card costs for small business
OTTAWA—The federal Opposition on Monday called on the Harper government to stop credit card companies from charging businesses higher fees for using premium cards.
The call came as a federal competition tribunal prepared to rule on whether Visa and MasterCard are engaging in anti-competitive behaviour.
Small business groups hope the tribunal will recommend that Ottawa forbid the major credit card companies from forcing retailers to accept cards that carry higher payment processing fees.
The high cost of processing credit card payments is hurting businesses, said Glenn Thibeault, the NDP consumer protection critic.
“Ultimately this results in reduced profit margins for merchants and higher retail costs for consumers,” he said in a statement.
Canadian companies already pay the highest credit card processing fees in the industrialized world, although Canadians enjoy some of the lowest debit fees among G20 nations.
In 2010, the Harper government introduced a voluntary code aimed at protecting small business from abusive practices by credit card companies.
The code is designed to protect small businesses, said Kathleen Perchaluk, Finance Minister Jim Flaherty’s press secretary.
“Credit and debit card providers must give small businesses and merchants clear information regarding fees and rates and the ability to cancel contracts without penalty should fees rise or new fees be introduced,” she said, while noting that the NDP voted against the code.
But voluntary codes don’t work and mandatory measures are needed, said Thibeault.
“While governments around the world have regulated the costs of credit card swipe fees, the Conservatives’ self-regulatory approach has failed Canadian merchants,” said Thibeault.
“Enough is enough; the Conservatives need to act now.”
Thibeault is starting a cross-country consultation with business and community groups this week to hear their concerns about the fees.
thestar.com – Business