Canadian Pizza Magazine

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CRFA expresses concern over the increase of Visa fees


November 26, 2012
By Canadian Pizza

Nov. 26, 2012, Canada – Garth Whyte, president and CEO of the Canadian
Restaurant and Foodservice Association, recently wrote an open letter to
Jim Allhusen, president and country manager of
Visa Canada Corporation, expressing concern over Visa's plan to increase
the cost of accepting credit cards in Canadian restaurants.

Nov. 26, 2012, Canada – Garth Whyte, president and CEO of the Canadian Restaurant and Foodservice Association, recently wrote an open letter to Jim Allhusen, president and country manager of
Visa Canada Corporation, expressing concern over Visa's plan to increase the cost of accepting credit cards in Canadian restaurants.

In the letter, Whyte states that the average full-service restaurant in Canada generates only 3.7 per cent in pre-tax profits, and the cost of accepting certain credit cards can be up to three per cent of the total bill (plus the credit card fee on tax and tip. To give an example, a restaurant owner could make an average of $3.70 on a $100 restaurant bill. If the customer uses a premium credit card, the processing fee for the restaurateur could be as high as $3.99 (three per cent fee calculated on $100 + $13 GST + $20
tip).

"It is unconscionable for the payment industry to make as much off of a restaurant transaction as the restaurateur who creates local jobs and invests in his or her community," Whyte says in the letter. "Adding insult to injury, the upcoming rate increases come at a time when Visa earnings have repeatedly surpassed expectations, prompting your company to double shareholder dividends and buy-back shares."

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Whyte also mentions that while Visa does not set the fees charged to merchants, the fee increases leave no choice to business owners than to pass costs on to customers. "We ask that you reconsider your plans to increase fees and introduce a
costlier class of credit cards and instead work with the Canadian
Restaurant and Foodservices Association to help make the costs of
accepting Visa cards affordable and predictable for all merchants."