UPDATE: JANUARY 18, 2010

Merchants voice their opinions on government Code of Conduct

The StopStickingItToUs Coalition and the Payments Accountability Council (PAC) applaud the Government of Canada’s efforts to bring clarity, transparency and merchant choice to the debit and credit card market in Canada through the Code of Conduct for Credit and Debit Card Markets.

An extention of the StopStickingItToUs Coalition, the PAC is a group representing 250,000 Canadian merchants, co-chaired by the Retail Council of Canada (RCC) and the Canadian Council of Grocery Distributors (CCGD).

Click here to read the PAC/SSITU submission to the Department of Finance.

UPDATE: November 19, 2009

Government announces Code of Conduct for credit and debit cards in Canada.

Draft Code of Conduct for the Credit and Debit Card Industry in Canada

Purpose

The purpose of the Code is to demonstrate the industry’s commitment to:

1.Ensuring that merchants are fully aware of the costs associated with accepting credit and debit card payments thereby allowing merchants to reasonably forecast their monthly costs related to accepting such payments.

2.Providing merchants with increased pricing flexibility to encourage consumers to choose the lowest-cost payment option.

3.Allowing merchants to freely choose which payment options they will accept.

For full details on the Code, please visit the Department of Finance webpage.

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Open Letter From The Chair of the StopStickingItToUs Coalition To All Merchants
Urgent Update - Credit And Debit Card Merchant Fees
October 19, 2009

As many of you know, the Stop Sticking It To Us Coalition of more than 30 associations across the country have been fighting on your behalf to stop the unprecedented increases in merchant credit and debit card fees in Canada. Thanks to our combined efforts and your support, these issues are front and centre in Ottawa and we continue to lead the fight on your behalf!

Of particular importance, given the imminent entry of Visa and MasterCard into the Canadian debit market, is the potential negative impact on your business and the increased costs associated with accepting these new debit products in your store.

With the help of more than 250,000 merchant businesses, RCC has made it clear to the Government that the following rules must be in place to protect your business and ensure competition.
1.Flat Fees
- Fees charged to merchants for debit transactions shall be on a flat, per-transaction basis.

2.Merchant Choice - Acceptance
- Merchants shall have the choice whether to accept both debit and credit products from a payment network.
- Merchants shall receive notice in writing of their right to choose whether to accept both debit and credit products from a payment network. Express authorization shall be sought from merchants as to their choice in this regard.
- Merchants shall not face additional fees or charges for exercising their right not to accept both debit and credit products from a payment network.

3.Merchant Choice - Presentation (”priority routing”)
- Merchants shall be able to choose the order in which payment networks are presented to their customers.
- A routing choice is required when two or more payment networks are present on a single debit card.
- When enabling merchants to accept co-badged cards, processors shall provide merchants with the ability to switch the order of presentation of payment networks to the customer.
- Merchants shall not face additional fees or charges for being enabled to switch the order of presentation of payment networks or for exercising that right to refuse a certain card.

4.Discounting/Surcharge
- Merchants may provide discounts or surcharges for different methods of payments and/or card brands and/or particular products offered by payment networks.

5.Debit = Cash
- Debit payments shall be irrevocable and final (no charge-backs).

What you need to know to protect your business:
Your processor (e.g. Moneris, Paymentech, Global, etc.) the banks issuing the cards or Visa and MasterCard may not be telling you the whole story.

The financial institutions issuing Visa or MasterCard may be sending new chip enabled debit cards to consumers in the months to come. Many of these cards may carry Visa or MasterCard in addition to Interac. Brand logos will appear on the back of the debit card.

Currently, as Interac is essentially the sole provider of debit services in Canada charging merchants a low flat fee through your processor, you benefit from cost certainty, finality of payment and reliable service for debit acceptance.

As Visa and MasterCard enter the Canadian debit market, you may not know how the customer’s debit transaction will be processed through your terminal and in your store.

By programming the chip in the card as well as programming your point of sale hand held terminals (PIN pad), Visa and MasterCard, some financial institutions and processors will try to ensure that the debit transaction is routed automatically to their preferred debit option - not yours. BUT YOU DO HAVE A CHOICE!

Talk to your processor, credit card company and/or financial institution about the choice you should be making - IT’S YOUR STORE. IT’S YOUR DECISION.
You do not have to accept these new debit products in your stores. Read your contract carefully. Tell your processor that you want to make the final decision on how a debit transaction will be processed in your store.

If you have been told that your PIN pads have been or will be programmed to accept Visa or MasterCard debit in addition to Interac, you can ask to have those new options disabled if you so choose, at not cost to you.

Processors may not have told you that Visa debit will be programmed in your PIN Pad unless you expressly opt out - meaning that unless you inform your processor that you don’t want to accept Visa debit (which will carry a percentage fee and NOT a flat fee), it will be programmed in your terminals and it will get priority routing over Interac without your consent.

While MasterCard is promoting a flat Maestro debit fee, you should be aware that like Visa, it charges a percentage debit merchant fee in the U.S. and our merchants report average fees of over 70 cents per transaction in that country.

Let’s protect our low cost, efficient and transparent debit system in Canada.
Contrary to other organizations, RCC believes that strict regulations must be in place to ensure compliance and merchant/customer protection.

We are your watchdog and we will continue to fight for your right to offer a low-cost, transparent and efficient debit system in Canada.

For more information, visit www.retailcouncil.org or call us at 1-888-373-8245.

Sincerely,

Diane J. Brisebois
President and CEO, Retail Council of Canada
Chair, StopStickingItToUs Coaltion

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Senate Committee Report Supports StopStickingItToUs Coalition’s Recommendations

In a unanimous report released on June 30, 2009, the Standing Senate Committee on Banking, Trade and Commerce supported a the need for government action on a number of concerns highlighted by the Coalition in its testimony and submission. The Senate report is a major first step toward creating a new “Made-in-Canada” payment system that will ensure accountability, transparency and a level playing field for all stakeholders.

Key recommendations include:
Credit
- appointment of an “oversight board” within an existing federal organization with a mandate to
   make  recommendations, by December 3, 2009, on any regulatory or legislative matters required to
   ensure fairness for participants in the credit card and debit card payments systems
- establish a code of conduct for payments systems participants and practices for setting fees and
   rates, in respect of which it should ensure compliance
- prohibit any “honour all cards” rules, including those that require merchants to accept a network
   operator’s higher-cost premium cards
- permit surcharging and/or discounting by merchants
- permit merchants to inform customers about relatively lower-cost payment methods

Debit
- require the calculation of switch and interchange fees on the basis of a flat fee for debit card
   transactions
- set the interchange fee at zero for a period of three years for all debit card transactions
- a recognition that there is no justification for percentage fees on debit transactions
- prohibit priority routing in order that cardholders are able to select, at the point of sale, their
   preferred payment method when using a co-badged card
- for the purposes of ensuring a level playing field, the Minister of Finance should deem Interac, Visa
   and MasterCard as designated payments systems under the Canadian Payments Act if he or she
   believes that this action is necessary to promote the efficiency and competitiveness of payment
   systems in Canada

CLICK HERE to read the full report

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Do you know what you pay to Big Credit Card companies in hidden fees everytime you shop?

Canadian consumers paid over $4.5 billion in hidden credit card fees last year alone - fees we all pay at the checkout to cover the cost of lavish incentive programs and corporate credit card benefits, even if you don’t have one!

Now these companies want to raise these skyrocketing hidden fees. With their plan, you pay more, your local retailer pays more and the only ones getting rich are the Big Credit Card companies. If they get their way, seniors, students and low-income Canadians will spend even more subsidizing corporate airfare points and luxury discounts every time they shop.

Retailers are at the heart of every Canadian community. There are over 227,000 retail stores in Canada - roughly 1 in 10 businesses is a retail establishment - and 95% of all retail stores in Canada are small or independent. They provide jobs for over 2.1 million Canadians and support local charities, sporting and cultural events from coast to coast.

Local retailers and businesses are taking action to stand up for consumers and put an end to these skyrocketing hidden fees.

Big Credit Card companies need to stop sticking it to us!