Retailers Rebel against Hiked Credit Card Fees

Consumers aren't the only ones perturbed by ever-increasing credit card fees. Retailers, too, are tired of the "continual and frequent increases" in service charges, says Gaston Lafleur of the Quebec Retail Council.

Lafleur and other Canadian retailers are in Ottawa this week lobbying for government regulation to keep credit card companies in check. And what happens if the credit card companies are left unregulated? Then retailers will just pass on the rising costs to us, the consumers, in the form of higher priced goods.

Visa and MasterCard have raised their service fees four times since October of 2007. Canadian retailers paid $4.5 billion in credit card service fees in 2008, which accounts for an average of 2% of each transaction total.

Retailers worry about credit card companies getting a foothold in the debit card arena, which is now run by not-for-profit Interac. Debit card service fees are currently set at a fixed rate of about 12 cents per transaction. But if Visa and MasterCard have their way, Canadian consumers would be able to start using their credit cards for debit transactions and fees could take a sharp 650% increase - an increase that consumers would feel in the form of higher prices.