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crfa to work with competition bureau to check skyrocketing credit card fees

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CRFA to Work with Competition Bureau to Check Skyrocketing Credit Card Fees



Good news to Canadian consumers, Canadian Restaurant and Foodservices Association (CRFA) said it would work closely with the Competition Bureau to pursue anti-competitive credit card practices and check the skyrocketing credit card fees.

The announcement came after the Bureau said it would not appeal a decision to dismiss a case it brought against the rules imposed on merchants by the Canadian arms of MasterCard Inc. and Visa Inc.

Resolving the Anti-Competition Issue
However the Competition Bureau said it would "focus our efforts on identifying alternate means of addressing the competition issues in the supply of credit card services in Canada. Commissioner of Competition John Pecman said in a statement. "We have decided not to appeal this decision ... the Competition Bureau will continue to pursue ways in which it can resolve the issue of anti-competitive credit card rules imposed by Visa and MasterCard on merchants in Canada.

Recently, Canada's Competition Tribunal rejected the bureau's complaint in July. The Competition Bureau, an independent agency, had argued that credit-card company rules prohibiting merchants from imposing a surcharge on card users had put customers at a disadvantage.

High Credit Card Fees: Still a ThornyIssue
"Skyrocketing credit card fees are one of the biggest issues facing our members today. They hurt business owners and the 18 million customers we serve every day," said CRFA President and CEO Garth Whyte. "We look forward to working with the Competition Bureau to seek relief through regulatory reform as recommended by the Tribunal."

Background:
1. With the advent of premium credit cards, it's not unusual for the credit card merchant fee to exceed the restaurant owner's profit on a meal.

To illustrate, on a $100 restaurant bill, the restaurant owner makes an average of $3.70 profit, according to industry data compiled by Statistics Canada. If the customer uses a premium credit card, a restaurateur in Ontario will pay a credit card processing fee as high as $3.99 on that transaction (3% fee calculated on $133 ($100 + $13 GST + $20 tip).

2. Because credit card fees are charged on top of sales tax, the restaurant industry alone pays $40 million a year in credit card fees on sales taxes.

CRFA is one of Canada's largest business associations, with 30,000 members representing restaurants, bars, caterers, institutions and other foodservice providers. Canada's restaurant industry generates $65 billion annually in economic activity and employs more than 1.1 million people in communities across the country.
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