Senator Seeks to Limit Credit Card Fees
A New Brunswick senator has tabled a bill proposing new legislation to limit Canadian credit card fees.
Liberal Senator Pierrette Ringuette, of Edmundston, says Visa and MasterCard charge Canadian merchants some of the highest fees in the world on credit card transactions.
She has been pushing for changes for years and tabled Bill S-215 on Tuesday.
Senator Pierrette Ringuette is expected to present her case for the bill with a speech at second reading later this week.(Senate of Canada)
The bill, which would amend the Payment Card Networks Act, would set benchmark fees of 0.5 per cent for standard transactions, 0.3 per cent for government, and no fee for charities.
The current fees sometimes exceed three per cent of the final transaction value, including taxes, said Ringuette. The costs are then passed on to consumers through increased prices on goods and services, she said.
Ringuette estimates the bill would save merchants and consumers $7.2 billion a year.
She is expected to present her case for the bill at a second reading in the Senate Chamber this week.
Credit card purchases reached $322 billion of goods and services in 2011. With an average of 2.5 per cent, those acceptance fees cost Canadians $9 billion, Ringuette said.
In 2009, the presidents of Visa and MasterCard, Canada’s largest credit card companies, cautioned the federal government against meddling in their business, saying it could hurt consumers.
They argued a voluntary code of conduct that had recently been enacted was working fine and a mandatory system could result in higher charges and fewer perks for consumers.
Federal Finance Minister Jim Flaherty had introduced the voluntary Code of Conduct for the Credit and Debit Card Industry in April 2009 after Ringuette had called for the industry to be reined in.
Under the code, merchants must be given clear information regarding fees and rates and given advance notice of any new fees and fee increases.
They must also be able to cancel contracts without penalty if fees rise or if new fees are introduced.