Canada Getting Close to Pact for Lower Credit Card Fees

Voluntary agreement could be finalized as soon as this month.

September 05, 2014

OTTAWA, Canada – Canadian Finance Minister Joe Oliver is pressing credit card companies and banks to accept lower transaction fees paid by retailers, which the government claims are among the highest in the world, according a recent report from Bloomberg News.

The government, which flagged the issue in its 2014 budget, wants MasterCard and Visa to voluntarily curb fees by about 10%, according to an unnamed source cited by the news source. These fees are set by the payment networks, with the bulk of the revenue passed on to Canadian banks.

The cuts would lead to lower costs for retailers, while eroding revenue for credit card firms and lenders. Banks say any efforts to cut transaction fees may force them to reduce card-holder benefits or eliminate cards.

According to the news source, officials from the two U.S.-based payments companies have held talks with the government in Toronto and an accord could be reached as early as this month. A voluntary pact would cover the bulk of credit card payments in Canada.

Advertisement
Advertisement
Advertisement