Lowering these fees will make doing business in Canada more affordable and will save Canadians money on their everyday purchases.
Approximately 1.5% of Canadian credit card spending goes directly to the big credit card companies and their issuing banks, drastically reducing a retailer’s profit margin. This is especially true for small business owners who pay a fee each time a customer uses their credit card.
This situation is even worse for online payments, or “card not present” payments, where the credit card companies charge an additional fee.
RCC has long fought for lower credit card interchange rates, securing a victory in 2015 with a reduction of the average rate from 1.65% down to 1.50%. Further success has been achieved with a commitment from Visa and MasterCard to lower their average rates from 1.50% to 1.40% in 2020. Altogether, the reduction efforts achieved by RCC will save merchants over $1 billion annually.
Despite these wins, Canadians still pay among the highest interchange fees in the world, and Canada is one of the few industrialized countries without regulations on this subject. This needs to change.
Worldwide, 37 countries have recognized the uncompetitive level of interchange fees and have moved to reduce and cap them. For example, France limits interchange to 0.28%, the EU is moved to a 0.30% cap across the board, Australia limits interchange to an average of 0.50%.
A newly elected government must
- Lower Canada’s interchange fees to align with other international jurisdictions to support small businesses in Canada.
- Lower the fees charged for online transactions, which are currently treated as “card not present.