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Discussion in 'Other Credit Card Programs' started by mtlfire, Jul 23, 2013.
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Competition Tribunal rejects change to credit-card fee rules
Quebec merchants, consumers decry credit card ruling
Does anyone seriously believe that if merchants are given the right to charge a surcharge for using a credit card that they will:
1) first cut the prices of goods and services that currently have the credit card fees built in;
2) charge variable fees for credit card use based on the type of card and the various levels of fees they pay the card companies;
3) charge only enough to pass along the actual credit card fee and not gouge by charging more (4% has been tossed around even though the fees are reported to be 1.5%-2.6%);
4) ensure that they do this equitably by also charging debit card users the processing fee;
5) ensure even more equity by passing along a cash surcharge to reflect the cost of handling cash?
Call me a cynic, but while I feel for the low-margin small business owner, I think the bigger guys are drooling over a chance to boost their margins here.
here is big government being used to stifle private enterprise. If people don't want to pay CC fees they should stopusing premium cards which are the norm now.
Here in the US, the Durbin Amendment capped debit card transaction fees a couple of years ago. As a result, banks dropped their mileage earning debit card programs (the only ones left are BofA/AS and SunTrust/DL) as they became less profitable. Prices for goods seem to have stayed the same. This kind of stuff is nothing more than business owners wanting to keep more of the money. Consumers will see absolutely no benefit.
Not sure about Canada, but in the US, several states (including some of the largest) have laws banning surcharges for credit card payments.
I'd expect that prices would remain the same and merchants would just start to refuse the premium cards. American Express is barely accepted at any of the places I shop at up here because of the fee's. The only major grocery chain that I can think of that takes it is Metro.
Would they be able to do that? Don't Visa, Mastercard, and AmEx all say that if you accept their cards, you have to accept all of them? Like you can't say, "We take this Visa, but not that Visa."
That is exactly the subject of this lawsuit.
Like Larry said, that was the point of the lawsuit. To either be able to decline the premium cards (Visa Signature, etc) because they charge a higher fee to the merchant, or for the merchant to be able to add a surcharge to people using the premium cards. They argue that it isn't fair that Visa requires you to accept all Visa cards if you want to partner with them.
Compared to the US, in Canada (well Quebec at least) Amex is not take in many, if not the majority of places simply because they charge a higher fee to the merchant than Visa and Mastercard.
In that case, what's to stop Visa or Mastercard from saying, "If you charge a surcharge for certain cards, we'll stop you from taking any Visa/MCs?" Not that I think they'd do that, just thinking out loud.
As it stands, nothing. The plaintiffs were clearly hoping that the answer to your question would be "a court order".
Do the agreements card issuers have with merchants have fixed lengths? Is it like an athlete signing a contract with a sports team? Could Visa/Mastercard walk away at the end of the contract because a merchant is charging a surcharge for premium cards? Or are they locked into the agreement indefinitely? This is what I was getting at above. Sorry for not being more clear - should probably have thought about what I wanted to say a bit more before I posted.
Right now they couldn't charge more, or refuse, so its not an issue.
Assuming the competition bureau had ruled otherwise, I would assume Visa/Mastercard could walk away immediately as the contract would be nul and void. But lets be honest, they aren't going to walk away from anything, they need merchants to accept their cards to make money.
What would likely happen is that they would have to drop their merchant fee's on the premium cards, and in return, offer less avantages to the consumers.