Canadian credit card companies charged $4.5 billion last year in hidden transaction fees and now a coalition of 16 organizations is asking the government to help ‘Stop sticking it to us.’
According to the Retail Council of Canada (RCC), nearly $2 of every $100 spent using a credit card goes to either Visa or MasterCard. The fees not only impact merchants who accept credit cards, but they eventually trickle down to consumers who end up paying more for goods and services.
The ‘Stop sticking it to us’ campaign asks Prime Minister Stephen Harper to work with the coalition to address the fees, which the RCC says is ‘an enormous burden for consumers and any organization that accepts payment by credit card—merchants, charities, schools, restaurants, hotels, and others.”
Canada is one of the few industrialized countries in the world that does not regulate fees, which the RCC says is the reason why it also has one of the highest at an average of two per cent. Credit card companies in Australia charge 0.45 per cent, compared to 0.79 per cent in the United Kingdom, and 0.9 per cent in Sweden.
The RCC says a large portion of the fees go toward covering the cost of credit card incentive programs and corporate credit card benefits. About 13 per cent goes toward the actual cost of processing transactions.
The coalition includes the Canadian Jewellers Association (CJA), the Canadian Restaurant and Foodservices Association (CRFA), and the Canadian Independent Petroleum Marketers Association (CIPMA).