TORONTO, Sept. 10 /CNW/ - Major credit card companies and the banks are
about to inflict a huge cash grab on merchants throughout this country, warns
Catherine Swift, president of the Canadian Federation of Independent Business
Swift said today in Toronto that credit card firms have introduced new
types of "premium" cards to consumers who spend above a certain threshold. She
explained merchants may be unaware that the exact same credit card can attract
a different merchant fee once it has been deemed "high spend" or where the
bank issuing the card detects that a certain dollar amount has been reached.
Furthermore, said Swift, credit card companies are now looking to enter
the debit card business in this country, which has until now been managed at
relatively low cost by Interac, a Canadian cooperative venture among financial
institutions and others. She pointed out Interac charges a flat fee regardless
of debit transaction size, but that the credit card companies would likely
move to a fee based on a percentage of the debit transaction size, massively
increasing the fees merchants would pay. "This would mean, for example," said
Swift, "for a transaction of $1,000, a current common flat fee would be $0.065
(6.5 cents). In future, if the charge was to become 0.65 per cent (the current
U.S. average), the fee would be $6.50 - an increase of almost 10,000 per
Swift said consumers haven't asked for these new credit cards or new
debit arrangements and are unaware of their negative impact on merchants.
"These changes are designed for one reason," said Swift, "to reap larger
profits for banks and credit card firms and complicate the merchant's ability
to know what they are paying to process transactions."
The business leader said CFIB has begun a national campaign to inform its
members and the independent business community at large about this issue, and
to engage their support in a political action campaign opposing this
initiative by the credit card firms and banks.
Swift said CFIB will be bringing its concerns and suggestions to
politicians of all parties as well as the appropriate government officials.
"We begin doing so next Monday," she said, "when we're scheduled to meet in
Ottawa with officials at the federal Department of Finance. They need to
realize this is a wrong-headed initiative at any time, but with a softening
economy it makes matters even worse."
For further information:
For further information: CFIB contacts for media: Catherine Swift, (416)
222-8022; More information on CFIB's web site: www.cfib.ca