Credit card code enhanced

April 14, 2015, Toronto — Restaurants Canada welcomes yesterday’s updates to the code of conduct for the credit card and debit card industry in Canada, but merchant fees remain an issue.

“We’re pleased the government listened to us and is taking steps to address the confusion, complexity and costs of mobile payments,” said Restaurants Canada executive vice-president Joyce Reynolds.

“We also told the government our members were concerned that network service providers (processors, acquirers, equipment leasers, and independent sales organizations) were not following the code of conduct, so we are pleased to see a new complaints-handling process will be put in place, and that merchants will have more flexibility to exit their contracts without penalty.”

The new requirement for credit card companies to clearly identify “premium” reward cards with higher fees is also good news, but the cost issues still have not been addressed.

“Merchants must still accept all cards,” says Reynolds. “Ultimately, it’s the merchants and their customers, regardless of how they pay for their meal, who foot the bill for the travel and rewards of the premium cardholders.”

Why more needs to be done

To level the playing field for all consumers, Restaurants Canada proposed limiting the “interchange” fee that credit card companies charge merchants. When the European Union starts limiting credit card interchange fees to 0.3 per cent this October, Canada’s fees will be five times greater – which means higher prices for Canadian consumers.

To make it fairer for restaurants and retailers, Restaurants Canada is also asking the government to stop credit card companies from profiting off the taxes these merchants must collect for the government.

“We welcome the progress made, but will push the government to do more so our members and their customers get a fair shake,” says Reynolds.