Canadian Retailer - January/February 2010 - (Page 14)

IN YOUR INTEREST A Game of Cards — What’s Next? Merchants Demanding Competition and Fairness In the Debit and Credit Card Industry in Canada. t’s amazing what the support of thousands of merchants across Canada, coupled with aggressive lobbying and public relations campaigns, can do to raise attention to what most agree is a complex and alarming issue – merchant credit and debit card fees. In the summer of 2008, as other retail associations around the world were addressing the rising tide of credit card fees with campaign names and web sites such as ‘unfair credit card fees’, Retail Council of Canada (RCC) led the Canadian battle with a less than subtle moniker – ‘Stop Sticking It To Us’. This not only raised eyebrows, but proved effective and indicative of growing merchant concern in the country. As part of its advocacy campaign, RCC built a coalition of like-minded groups amassing the support of no less than 30 merchant associations representing over 200,000 businesses, the great majority of them small and mid size merchants. And while there may be diverging views between small, mid and large merchants on some business fronts, this issue proved to be a rallying call for all. Happily, after nearly 18 months of diligence, RCC’s ‘Stop Sticking It To Us’ coalition prevailed. Senate and House of Commons hearings were established and merchants found more than just a sympathetic voice. In a unanimous report released on June 30, 2009, the Standing Senate Committee on Banking, Trade and Commerce supported the need for government action on many of the concerns highlighted by the Coalition. The Senate report was a major first step toward creating a new “Made-in-Canada” payment system that would ensure accountability, transparency and a level playing field for all stakeholders. I P H OTO C O U RP H OTO C O U R IT E SY A N DAV I D C H A N T E SY O F DAV D C H O F Canadian Finance Minister Jim Flaherty (l) and RCC President and CEO Diane Brisebois (r) following the announcement KEY SENATE RECOMMENDATIONS Credit • appointment of an “oversight board” with a mandate to make recommendations, by December 3, 2009, on any regulatory or legislative matters required to ensure fairness for participants in the credit card and debit card payments systems • establish a code of conduct for payments systems participants and practices for setting fees and rates, in respect of which it should ensure compliance • prohibit any “honour all cards” rules, including those that require merchants to accept a network operator’s higher-cost premium cards • permit surcharging and/or discounting by merchants • permit merchants to inform customers about relatively lower-cost payment methods Debit • require the calculation of switch and interchange fees on the basis of a flat fee for debit card transactions • set the interchange fee at zero for a period of three years for all debit card transactions • there is no justification for percentage fees on debit transactions • prohibit priority routing in order that cardholders are able to select, at the point of sale, their preferred payment method when using a co-badged card • for the purposes of ensuring a level playing field, the Minister should deem Interac, Visa and MasterCard as designated payments systems under the Canadian Payments Act Good Comes to Those Who Wait? While RCC advocated for regulations and applauded the Senate report, on November 19, 2009, Canadian Finance Minister Jim Flaherty made the announcement of a proposed voluntary code of conduct for Canada’s credit and debit card networks and their participants. However, the Minister also noted that while this was a voluntary 14 | C A N A D I A N R E TA I L E R | J A N UA R Y/ F E B R U A R Y 2 010 |

Table of Contents for the Digital Edition of Canadian Retailer - January/February 2010

Canadian Retailer - January/February 2010
Publisher’s Desk
Shop Talk
Store Design
In Your Interest
Retail Generations
Retail Profile
Loss Prevention Supplement
Human Resources
Marketing and Advertising
Member Profile
Advertisers’ Index
You Asked Us

Canadian Retailer - January/February 2010