A coalition representing more than 90,000 small and medium-sized businesses in Canada, has pledged to reduce credit card swipe fees.
The Small Business Matters Coalition was formed earlier this year in response to the fees businesses incur each time a shopper uses a credit card during a transaction. The Competition Bureau of Canada estimates about $5 billion in these fees is paid annually by Canada’s retailers.
Gary Sands, chair of the coalition and vice-president of public policy for CFIG, says the pledge is meant to display to the public that a reduction in credit card fees will benefit the consumer as well as the retailer. “There’s no doubt that [these fees] are going to have an impact on the way retailers price products and how much they’re able to invest in their stores,” he says.
Sands noted the fees are a burden to small businesses, but hit especially hard in the grocery sector because of its tight margins.
The Retail Council of Canada and CFIG both issued statements calling Ottawa to cut fees this past October. Canada’s code of conduct was a good step towards credit and debit card regulation, says Sands, but at the time businesses were skeptical it would address the systematic problem in increasing feeds. They’re now able to demonstrate to the government that a reduction is needed.
“In addition to reducing fees, its equally important to establish a process that will provide the retail community with transparency and accountability in how fees are set by the credit card companies,” said Alex Scholten, vice chair of the coalition and president of the Canadian Convenience Stores Association, in a press release.
The pledge, which includes the logos of the associations in support, has been sent to Finance Minister Joe Oliver, and copied to Members of Parliament and provincial Ministers of Finance across Canada.
The coalition will spend the next few weeks waiting to hear back, but Sands is confident the government will respond.
Other countries, including Australia and Spain, have imposed controls on credit card fees.
The pledge reads:
Members of the Small Business Coalition, representing thousands of businesses across Canada, urge the Government of Canada to reduce credit card swipe feeds and to bring fairness and transparency to the Canadian Payments Industry.
In turn, our members pledge that the reduction in credit card fees will be to the benefit of consumers and communities across Canada, through improved competitiveness, increased investment, job creation and reduced consumer prices.