April 15, 2011 – On the eve of the one-year anniversary of Finance
Canada's introduction of the Code of Conduct for Credit and Debit Card
Industry in Canada, Retail Council of Canada (RCC) released its report
card on credit and debit card industry practices.
April 15, 2011 – On the eve of the one-year anniversary of Finance
Canada's introduction of the Code of Conduct for Credit and Debit Card
Industry in Canada, Retail Council of Canada (RCC) released its report
card on credit and debit card industry practices.
"We are hearing loud and clear from our merchants that the payments
industry has continued to engage in practices that result in high fees
that have no connection to the service provided and some players have
blatantly violated the voluntary code" said Diane J. Brisebois,
President and CEO, Retail Council of Canada. "We think the time has
come to move beyond the code to ensure flat merchant fees for debit card
transactions, the elimination of higher merchant fees for premium
credit card transactions, real competition for merchant acceptance and a
formal stakeholder-driven mechanism for all elements of the Canadian
payments system" said Brisebois.
She went on to comment "the main thing that the code accomplished is
that it shined a light on the practices of the payments system and made
it clear to retailers that there is no real competition in the
marketplace. The only competition that exists is among the banks to
provide customers with greater incentives on the backs of merchants."
"Our position has remained the same since we started this campaign
almost three years ago – that regulation is the ultimate solution to
bring fairness, accountability and true competition to this market,"
Brisebois added.
"Retailers recognize that Minister Flaherty's introduction of the code
maintained the low-cost, secure, made-in-Canada Interac debit system. In
order to build on this success, we encourage the Government to take the
next step and work with us to ensure that Canadians have a robust and
competitive payments marketplace" concluded Brisebois. Minister Flaherty
has already served notice to the card companies that if the voluntary
code is not sufficient, he would be prepared to look at other options.
We believe that time has now come.
Key findings from RCC's member survey are:
1. Changes to Merchant Discount Rates – March 2010 to March 2011
-80% of respondents indicated that their merchant discount rates have
either increased or remained the same over the past 12 months.
Grade: D
2. Increase in premium card use in Canada's credit card market
-57% of respondents have seen an increase in premium card use in their stores over the past 12 months
Grade: C-
3. Disclosure of fees and rates on merchant statements.
-54% of respondents indicate the disclosure on their monthly merchant
statements has remained unchanged since the introduction of the Code.
Grade: C-
4. Acquirers informing merchants of their right to cancel contracts if fees increased.
-64% of respondents have not received any notification from their
acquirer/processor that they have the right to cancel their current
contracts with no penalties once receiving notification of a fee
increase.
Grade: D
5. Competition in Canada's payments market – benefits to merchants from changing acquirers/processors.
-80% of respondents believe they will receive no real benefit from
switching acquirers/processors if they choose to cancel their current
contract.
Grade: F
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