(GlobeNewswire) - Restaurants Canada welcomes todays announcement from Finance Minister Bill Morneau and Mary Ng, Canadas new minister for small business and export promotion, regarding new deals with major credit card companies to reduce the fees they charge Canadian businesses.
The voluntary, five-year deals with Visa, Mastercard and American Express will provide much needed relief for foodservice operators, who spend billions of dollars each year on credit card interchange and processing fees.
This is a step in the right direction, said Shanna Munro, Restaurants Canada President & CEO. Eighty per cent of our members tell us that interchange fees hurt their bottom line. We are pleased to see the government respond to their concerns and we will continue to work towards achieving greater relief as soon as possible. Small- and medium-sized businesses struggle most with these fees these are middle-class Canadians and when their businesses thrive, so do their communities.
Visa and Mastercard have committed to lower the fees they charge businesses to an average annual effective rate of 1.4 per cent down from 1.5 per cent for a period of five years, and narrow the gap between the highest and lowest rates they collect from retailers.
American Express has promised to provide more fairness and transparency as part of a separate voluntary agreement that recognizes its unique business model.
Merchant fees in Canada are among the highest in the world and have long been a major concern for foodservice operators across the country. Despite modest reductions negotiated in 2014, the billions of dollars that merchants pay annually in interchange and other fees continues to rise as consumers are enticed by premium reward cards. The rewards are financed not by the card companies or issuers, but by restaurateurs and other small businesses.
On a typical restaurant meal, the credit card issuer often makes more profit than the restaurateur, said David Lefebvre, Vice President, Federal & Quebec. We look forward to continuing our work with government creating a fair and level playing field for all restaurant owners and entrepreneurs.
As a next step, Restaurants Canada is proposing that the federal government impose a cap on interchange fees and prohibit credit card issuers from increasing and adding new fees without regulatory oversight. The association is also looking to government to remove interchange fees from the tips and taxes portion of purchases.
About Restaurants Canada
Restaurants Canada (formerly CRFA) is a growing community of more than 30,000 foodservice businesses, including restaurants, bars, caterers, institutions and suppliers. We connect our members from coast to coast, through services, research and advocacy for a strong and vibrant restaurant community. Canadas restaurant industry is an $85 billion industry, directly employs 1.2 million Canadians, is the number one source of first jobs and serves 22 million customers every day.
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