Second reading for anti-credit-card ripoff bill

Visa & Master Card charges can reach over 3% of the final transaction value, a total that includes 3% on top of HST

By Tony Elenis –

Senator Pierrette Ringuette tabled a Senate Public Bill S-215 An Act To Amend The Credit Card Payments Act (Credit Card acceptance Fees) to set limits on the fees that VISA and MasterCard payment networks charge to merchants for accepting their credit cards, fees that are can reach over 3% of the final transaction value, including taxes.

The bill is currently in second reading in the senate, and needs to move to the banking or finance committee sometime in April.

The ORHMA applauds Senator Ringuette for issuing this Bill as the mark up fees are the key concern for business prosperity. Most of Ontario’s restaurants operate below a 3% profit margin experiencing storm after storm of economic woes. Ontario’s accommodation industry has seen a 50% reduction in profit margin since the year 2000.

In every other markets increased competition means more benefits and lower prices. Canada has some of the highest acceptance fees in the world, bill S-215 will set benchmarks at 0.5% for standard transactions, 0.3% for government, and 0% for charities.

Visa, MasterCard and the banks that issue their cards are taking advantage of businesses exploiting loopholes that keep the true cost of skyrocketing credit card fees hidden from average consumers and merchants. Hospitality and other businesses they serve are jeopardized by the selfish actions of the Big Credit Card companies. These companies continue to line their pockets without any government oversight or push-back from other players.

Credit card purchases reached $322 billion of goods and services in 2011. With an average of 2.5%, those acceptance fees cost Canadians $9 billion. With this legislation in place, Canadian merchants and consumers could save upwards of $7.2 billion annually.

The ORHMA asks the Senate and in turn Parliament to support Senator Ringuette’s Bill as it is the solution required to even an unfair playing field.

The Ontario Restaurant Hotel & Motel Association (ORHMA) is the largest provincial hospitality association in Canada. With over 4,000 members, representing more than 11,000 establishments across the province, the ORHMA is uniquely positioned to represent the issues that most impact the hospitality industry.