Canadian Pizza Magazine

News
Competition Bureau continues to address credit card fees


October 4, 2013
By Canadian Pizza

Oct. 4, 2013, Ottawa – The Competition Bureau will continue to pursue the issue of anti-competitive credit card practices, despite a recent ruling by the Competition Tribunal that it would not take action on the issue.

The Bureau noted that it won’t appeal the Competition Tribunal decision, but will “focus our efforts on identifying alternate means of addressing the competition issues in the supply of credit card services in Canada,” said the Competition Bureau in a media statement.

“Skyrocketing credit card fees are one of the biggest issues facing our members today. They hurt business owners and the 18 million customers we serve every day,” said CRFA president and CEO Garth Whyte, in a news release. “We look forward to working with the Competition Bureau to seek relief through regulatory reform as recommended by the Tribunal.”

Here is some background on the issue:

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With the advent of premium credit cards, it’s not unusual for the credit card merchant fee to exceed the restaurant owner’s profit on a meal. Statistics Canada finds that on a $100 restaurant bill, the owner makes an average of $3.70 profit.

If the customer uses a premium credit card, a restaurateur in Ontario will pay a credit card processing fee as high as $3.99 on that transaction (3 per cent fee calculated on $133 ($100 + $13 GST + $20 tip).
Since credit card fees are charged on top of sales tax, the restaurant industry alone pays $40 million per year in credit card fees on sales taxes.