If you own a retail business, you will understand exactly what the issue at hand is all about. How much of your hard-earned money goes to the credit card companies through fees and charges that seem to keep rising?
Canadian Finance Minister Jim Flaherty recently announced the implementation of a voluntary code of conduct for the credit card industry. The new Code of Conduct has come in response to increasing complaints by small businesses about the excessive fees that they are being forced to pay.
The voluntary Code of Conduct, which may be revised over the next couple of months according to Mr. Flaherty, lists measures to give merchants freedom of choice in regards to which payment vehicle to use. The Code requires posting of online information regarding the interchange fees charged to retailers. It will also require the credit card companies to give retailers 90 days notice of any fee changes.
Responding to the announcement of this new Code, retailers view this as a positive development but would also like Ottawa to create an oversight body to ensure adherence. Creation of a parliamentary committee was one possible suggestion.
Mr. Flaherty pointed out that this Code of Conduct is voluntary and he hopes that the credit card companies will respond positively by voluntarily adopting the measures set out for the industry. The alternative, according to the Finance Minister, is to regulate the industry through legislation. But, as the credit card industry has objected vehemently to regulatory legislation, it is hoped that they will adopt the voluntary measures.
As other voluntary codes of conduct have been adopted by other industries, retailers hope that the credit card giants will similarly adopt these new guidelines.
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