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As CFIG members are well aware, over the last 5 years, one of the cornerstones of our ongoing advocacy efforts has been the battle to reduce credit card interchange fees. Back in 2014, there seemed to be no end in sight for the continuing spiral in fees. Some progress was made in 2014, when the Harper government brought forward a voluntary reduction in overall fees to 1.5%. While some associations accepted this as a win, CFIG did not. We continued to battle for further reductions, pointing out to all parties in the 2015 federal election, that the reduction to 1.5% overall, was not significant. As well, with premium card rates still high, achieving the 1.5% was also difficult to realize. Most importantly, CFIG pointed out that the interchange fees paid by companies such as Wal-Mart and Costco, were well below the rates imposed on small and medium size Canadian businesses.
Under the current government, progress has been made and when the existing agreement expires on March 31st of this year, new gains that we achieved on your behalf will come into force. They are:
- Further reduction in the overall interchange rate to 1.4%, and further reductions in premium card rates to help ensure overall targets are reached.
- The inclusion of American Express in the new agreement.
- Reductions subject to independent audit.
Notwithstanding that this new five-year agreement was coming into effect on April 1st, during the most recent federal election, CFIG again pushed for further measures on these interchange fees. During the campaign, the Prime Minister announced that the interchange fees paid on HST/GST would be eliminated. These fees amount to millions of dollars. The NDP also promised they would push for a hard cap of an overall 1% rate. Unfortunately, the Conservatives declined to commit to further action.
WHAT’S NEXT?
Once the new agreement kicks in this April, we will need your help to help you. What we mean by that, is to convince the new minority Parliament with facts, that more needs to be done to close the gap between what a Wal-Mart pays and what our members pay in fees.
We will need data to support our advocacy efforts. Members will be asked in the coming weeks, to begin tracking their overall fees and providing that information to us directly. ALL INFORMATION IS TREATED AS CONFIDENTIAL. CFIG will only provide overall aggregate data to Ottawa in support of our push for more reductions. As well, we will provide you with a draft template letter to send to your Member of Parliament. It is much more impactful for an MP to receive a letter from a constituent on this type of issue, than receiving one in Ottawa from an association.
We are in this together. And together we can help bring more fairness and transparency to our credit card payments system.
