Canadian C-Stores Have Mixed Reaction to Credit Card Fee Deal

Retailer association says swipe fees still too high, despite fee reduction agreed upon this week.

November 06, 2014

TORONTO – The Canadian Convenience Stores Association (CCSA) and its members have responded to Tuesday’s announcement that Visa and Mastercard have agreed to lower their interchange fees, effective by April 2015.

"We thank Minister Oliver and Finance Canada for their attention and efforts to address our concerns regarding these fees," Alex Scholten, CCSA president, said in a press release. "Credit card swipe fees in Canada are amongst the highest in the world and our retailers have suffered."

A five-year "freeze" on the rates, noted in the agreement, is also welcome relief for retailers, as swipe fees have risen sharply over the past several years. Continued rate increases would have had severe impacts on small business members across Canada.

"Although any rate relief is welcomed, a reduction to only 1.5% is disappointing and will offer little relief for our small business retailers," added Scholten. The CCSA remains concerned that the ability of retailers to use the expected savings to hire more people, invest in their businesses or reduce consumer pricing will be limited.

"Canada's c-store retailers would have great concern about this and our associations will continue to express that concern," said Scholten.

Governments in other jurisdictions, such as Australia and the EU, have imposed rate caps in the range of 0.5%. These rate reductions were based on research that indicated such rates would not have a detrimental effect on credit card payments. The CCSA and its members are hopeful that beyond the voluntary rate reduction, the Canadian government will consider this approach in future.

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