Retailers want fed action on credit card fees

Stephen Harper’s newfound interest in helping middle-class consumers by tackling bundled cable TV packages and smartphone roaming fees has retail associations hoping he’ll also lower credit card fees.

Following last week's speech from the throne, the Retail Council of Canada (RCC) and the Canadian Federation of Independent Grocers (CFIG) both issued statements calling Ottawa to cut fees.

The throne speech, which outlines the government's upcoming agenda, featured several consumer-friendly pledges. One was to do away with hidden card fees.

"Our Government will take additional action to protect Canadian consumers. Canadians are tired of hidden fees. They deserve to know the real cost of paying by debit or credit card," Governor General David Johnston said during last Wednesday's throne speech.

However, associations like RCC want the government to go one step further and cut credit-card fees, which retailers must pay but whose cost, they say, is invariably passed on to consumers.

“RCC’s view is that simply telling people how much they are being overcharged for credit-card fees does not solve the problem.  We need real action to address this issue," Diane Brisbois, the association's president, said in a statement.

RCC represents some of the country's biggest retailers, including Walmart Canada, Loblaw, Sobeys and Metro.

With a federal election likely by 2015,  the Harper Conservatives used the throne speech to touch on several issues that seem to irk consumers.

For instance, the government pledged to force cable TV companies to unbundle cable packages and let consumers choose the channels they wish.

The government also said it would take steps to reduce cellphone roaming costs.

With that, Gary Sands, VP of public policy at CFIG, said that, "if the government can regulate roaming fees they can regulate credit fees.  Period."

Sands noted that the credit-card market in Canada is dominated by two companies (MasterCard and Visa) that control 90% of the market. By comparison, the big three wireless networks (Rogers, Bell and Telus) control 85% of their market.

His point: If Ottawa is paying attention to market concentration in wireless it should also look more closely at the credit card market by protecting the interests of retailers and consumers.

"In the payments field we have two players controlling 90% and all we will maybe get, is some vague reference to transparency that retailers are being gouged?"

CFIG, together with Canadian Independent Petroleum Marketers Association and the Canadian Convenience Stores Association are together demanding fees be lowered.

Canadian retailers pay an estimated $5 billion each year in credit card swipe fees (at rates which are amongst the highest in the world), which in turn drives up the cost of everyday products regardless of how Canadians choose to pay for them, according to the group.

In July,  the federal Competition Tribunal had dismissed a complaint that Visa and MasterCard violated the Competition Act by forcing merchants to accept credit cards carrying higher fees.

It had cited that a regulatory solution was the appropriate way forward to address Canada’s high merchant swipe fees.