Independent retailers stand with consumers in opposing surcharges on credit
and debit cards

TORONTO, Jan. 19 /CNW/ - The Canadian Federation of Independent Grocers (CFIG) has responded to the federal government's request for comments on the new code of conduct for the payments industry and sides with the Consumer's Association of Canada in opposing surcharging consumers for using credit and debit cards.

According to CFIG President and CEO John Scott, "surcharging consumers for using a debit or credit card, simply punishes the customer for continually escalating fees levied by the card and payments industry on the backs of retailers." Scott added that passing those charges on to consumers, especially in a time of a fragile economic recovery, "is not a solution to the problem of high credit and debit fees. Our independent retail grocers always have and continue to stand on the side of consumers."

CFIG is calling on the federal government to adopt and finalize the code of conduct as soon as possible, and to ensure that competition in the debit card market exists by ensuring that Interac continues to be available to both consumers and retailers as a relatively low cost alternative to the products offered by the companies that control 945 of the credit card market.

A complete copy of the CFIG response to Minister Jim Flaherty's proposed Code of Conduct is available on request.


    Monday, January 18, 2010

    Hon. Jim Flaherty, M.P., P.C.
    Minister of Finance
    Confederation Bldg, Rm. 207
    140 O'Connor St.
    Ottawa, ON K1A 0G5

    Dear Minister:

    On behalf of the Canadian Federation of Independent Grocers (CFIG), I
    wish to provide you with our response to the draft Code of Conduct that
    will govern credit and debit card companies.

    CFIG is a national, not for profit trade association that represents the
    unique interests of independent and franchised retail grocers. Our
    members are primarily small and medium size business owners who are an
    integral and critical part of a myriad of communities across Canada. In
    an industry whose hallmark is becoming one of heightened concentration,
    independent retail grocers understand very well the demands of a
    competitive marketplace. However, they need to compete in an environment
    that promotes and sustains fair business practices, particularly in the
    area of payment systems, which constitutes the infrastructure of any
    retail entity.

    It is difficult, putting it mildly, for independent retailers to
    understand why major players in the credit and debit card industry, who
    hold approximately 94% of the market, and still free to set their own
    rates and fees, are complaining about adhering to a code of conduct.

    Both you and your department will be receiving responses to the Code from
    the Retail Coalition, or Payments Accountability Council, and other
    retail organizations. We have reviewed most of these submissions and
    largely echo and support many of the comments and observations that they
    have made. However, it is important to put our concerns in the context of
    the food industry and the realities in which our members must face every

    Over the last twenty years, according to data compiled by Agriculture and
    Agri-food Canada, thousands of independent retail grocers have become
    casualties to these realities and have been forever lost to the industry
    and the communities they served. In an increasingly concentrated
    industry, it is vital that we ensure that the independents who have
    survived, can do so without the continued squeezing of margins by
    monolithic credit card companies, whose unilateral actions simply stem
    from the fact that they control 94% of the market. Neither they, nor
    payment processors, have been held accountable. Indeed, the letter we
    sent to Chase Paymentech in November (enclosed), raising our objections
    to the 'negative option' that is being imposed on our members, has never
    been answered. In this market, they simply, but unfortunately, don't feel
    they need to answer to retailer concerns.

    Ensuring that independent retail food grocers survive is vital to our
    food industry and to that aforementioned myriad of communities,
    particularly in rural Canada, in which they are rooted. To do that, along
    with implementing key provisions and principles of the Code, Canada must
    preserve Interac as a lower cost, flat fee debit card alternative.

    This ensures that the spirit and intent of leveraging competitive
    practices through the Code, can in fact, be realized.

    The credit card companies have recently approached larger retail grocery
    food chains to negotiate rates and fees with respect to debit card
    transactions. There has been no such approach to our small and medium
    size members, and in fact, such negotiations will not take place with
    small and medium size retailers. There is no necessity for two parties to
    negotiate, if one party does not see the need.

    Nor conversely, do small and medium size business have anywhere near the
    leverage to 'negotiate' a rate with Visa or MasterCard. That is precisely
    why the Interac alternative must be available. Without it, the future of
    independent retail grocers is at risk, and we urge both you and the
    Competition Bureau to review Interac within that context. It is
    inexorably linked to the ability of all small and medium size retailers
    to be able to compete on the retail landscape.

    While it is also our request to clearly include the payment processors,
    such as Chase Paymentech and Moneris in the Code, CFIG wishes to applaud
    you and your officials, in particular Lynn Hemmings, for listening
    carefully to our concerns which we believe have been reflected in the
    Code. Lynn has ensured that no stakeholder can feel that there has not
    been genuine consultation. This code of conduct is a significant step
    forward and while we are not enamored of certain provisions relating to
    fee increase notification, we know that you have sought to strike a
    balanced and fair approach, which the Code does.

    Attached to this letter is our response to each one of the points
    outlined in the Draft Code of Conduct which you released in December,
    2009. Thank you again for addressing our concerns and CFIG looks forward
    to working with you and your officials in the months ahead.


    John F. T. Scott
    President & CEO

    c.  Ms. Melanie Aitken,
        Commissioner of Competition

        Ms. Lynn Hemmings,
        Senior Chief, Financial Sector Division


SOURCE Canadian Federation of Independent Grocers

For further information: For further information: John F. T. Scott, President, (416) 492-2311 ext.229

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