Senate Recognizes Need for Greater Transparency and Accountability in
Canadian Debit and Credit MarketsOTTAWA, June 30 /CNW/ - The StopStickingItToUs Coalition, representing
over 250,000 Canadian merchant businesses, commends the Standing Senate
Committee on Banking, Trade and Commerce for its report released today
recommending fundamental changes to the way credit card companies, banks and
payment processors operate in Canada. The unanimous report, focusing on the
fees and rates charged to merchants and consumers, follows months of testimony
from key players in the payments market, including merchant and consumer
groups, credit card companies and Canada's largest financial institutions,
among others.
"The Committee has clearly recognized that market forces alone aren't
enough to defend us from the market dominance of the two major credit card
companies and the banks," says Diane J. Brisebois, President and CEO, Retail
Council of Canada. "The Senators saw the need for government to confront abuse
in the credit market, and to protect Canada's low-cost and efficient debit
system. The Coalition shares the Senate Committee's view that government must
move swiftly to protect consumers and merchants."
The StopStickignItToUs Coalition thanks Senator Pierrette Ringuette for
initiating this inquiry, and appreciates the leadership shown by Senator
Michael Meighen, Committee Chair, who worked diligently with all committee
members to build the consensus that shaped this landmark report.Key recognitions and recommendations:
Credit
- appointment of an "oversight board" within an existing federal
organization with a mandate to make recommendations, by December 31
2009, on any regulatory or legislative matters required to ensure
fairness for participants in the credit card and debit card payments
systems
- establish a code of conduct for payments systems participants and
practices for setting fees and rates, in respect of which it should
ensure compliance
- prohibit any "honour all cards" rules, including those that require
merchants to accept a network operator's higher-cost premium cards
- permit surcharging and/or discounting by merchants
- permit merchants to inform customers about relatively lower-cost
payment methods
Debit
- require the calculation of switch and interchange fees on the basis
of a flat fee for debit card transactions
- set the interchange fee at zero for a period of three years for all
debit card transactions
- a recognition that there is no justification for percentage fees on
debit transactions
- prohibit priority routing in order that cardholders are able to
select, at the point of sale, their preferred payment method when
using a co-badged card
- for the purposes of ensuring a level playing field, the Minister of
Finance should deem Interac, Visa and MasterCard as designated
payments systems under the Canadian Payments Act if he or she
believes that this action is necessary to promote the efficiency and
competitiveness of payment systems in CanadaThe Senate report is a major first step toward creating a new
"Made-in-Canada" payment system that will ensure accountability, transparency
and a level playing field for all stakeholders. A number of key concerns and
recommendations put forth by the StopStickingItToUs Coalition have been
adopted by the Senate Committee after several months of thoughtful
deliberation and debate. The report will now be sent to the government for
consideration.
"After hearing from the many stakeholders involved in the payments
system, including card companies, banks and processors, Senators from both
sides of the aisle agree that this market is broken," says David Wilkes,
Senior Vice President, Canadian Council of Grocery Distributors. "Merchants
and consumers from coast-to-coast-to-coast look forward to government action
based on the recommendations from this comprehensive study."
The StopStickingItToUs Coalition has been at the forefront of this issue
with a national campaign that began in the fall of 2008 to expose the
questionable practices of credit card companies, banks and payment processors
that have resulted in skyrocketing fees for merchants and consequential price
increases for consumers. Thanks to the unwavering work of the Coalition,
Canadians witnessed an unprecedented level of activity on Parliament Hill,
which included the Standing Senate Committee on Banking, Trade and Commerce
inquiry, an ongoing Competition Bureau investigation of Visa and MasterCard
under the "abuse of dominance" rules of the Canadian Competition Act, and
Joint Finance and Industry Committee Hearings in the House of Commons.
"The Committee has heard the concerns of more than 250,000 merchants from
across the country and recognized the enormous negative impact it has on small
businesses in particular," says Dave Bryans, President, Canadian Convenience
Stores Association. "Our members rely on debit payments and the Senators
clearly understood that something needs to be done."
About the StopStickingItToUs Coalition
The StopStickingItToUs Coalition is a group of Canadian associations, led
by Retail Council of Canada and backed by over 250,000 businesses from
coast-to-coast, that is standing up to the Big Credit Card Companies to put a
stop to skyrocketing fees. Its members include: Retail Council of Canada,
Alberta Liquor Store Association, Canadian Booksellers Association, Canadian
Convenience Stores Association, Canadian Council of Grocery Distributors,
Canadian Federation of Independent Grocers, Canadian Jewellers Association,
Canadian Restaurant and Foodservices Association, Hotel Association of Canada,
Ontario Accommodation Association, Ontario Restaurant Hotel and Motel
Association, Retail B.C, The Canadian Independent Petroleum Marketers
Association, The British Columbia Restaurant and Food Services Association,
The Retail Merchant's Association of Canada (Ontario). Wine Council of
Ontario, Mega Group Inc. Bicycle Trade Association of Canada, Canadian Oil
Heat Association, Conseil québécois du commerce de détail, Camping in Ontario,
Tourism Industry Association of Canada, and the Canadian Association of Chain
Drugstores. Québec affiliate members: Association des marchands dépanneurs et
épiciers du Québec, Association des détaillants en alimentation du Québec,
Association des détaillants en matériaux de construction du Québec,
Association des hôteliers du Québec, Conseil des chaînes de restaurants du
Québec, Conseil canadien de la distribution en alimentation-Québec.
About Retail Council of Canada
Retail Council of Canada (RCC) has been the Voice of Retail in Canada
since 1963. We speak for an industry that touches the daily lives of Canadians
in every corner of the country - by providing jobs, career opportunities, and
by investing in the communities we serve. RCC is a not-for-profit,
industry-funded association representing more than 40,000 store fronts of all
retail formats across Canada, including department, specialty, discount, and
independent stores, and online merchants. RCC is a strong advocate for
retailing in Canada and works with all levels of government and other
stakeholders to support employment growth and career opportunities in retail,
to promote and sustain retail investments in communities from coast-to-coast,
and to enhance consumer choice and industry competitiveness. RCC also provides
its members with a full range of services and programs including education and
training, benchmarking and best practices, networking, advocacy, and industry
information.
About The Canadian Council of Grocery Distributors
The Canadian Council of Grocery Distributors (CCGD) is a not-for-profit
organization committed to advancing and promoting the grocery and foodservice
distribution industry in Canada, at both the regional and national level. The
food distribution industry is Canada's second largest commercial sector.
Member sales represent $71.8 billion in retail and $12 billion in foodservice.
Members employ over 428,100 Canadians, and represent over 85% of all grocery
(i.e. food, non-good, non-alcoholic beverages) distribution sales in Canada.
For further information: or to arrange an interview, please contact Mark
Beazley, Director, Communications, Retail Council of Canada at (416) 922-0553
ext. 228, email mbeazley@retailcouncil.org
