Visa strongly urged to reconsider planned fee hike: CRFA
The Canadian Restaurant and Foodservices Association is urging Visa Canada Corp. to reconsider its planned hike in credit card fees.
In an open letter to the credit card giant, CRFA president and CEO Garth Whyte writes that the average full-service restaurant in Canada generates 3.7% in pre-tax profits, while the cost of accepting some credit cards can be up to 3% of the total bill.
"It is unconscionable for the payment industry to make as much off a restaurant transaction as the restaurateur who creates local jobs and invests in his or her community," he wrote.
"Adding insult to injury, the upcoming rate increases come at a time when Visa earnings have repeatedly surpassed expectations, prompting your company to double shareholder dividends and buy-back shares."
Whyte states that when card fee structures were adjusted in 2008, business owners had no choice but to pass the costs on to consumers.
The CRFA is not the only organization concerned about the planned fee hikes. The Canadian Federation of Independent Business announced October 30 that it had "strong concerns" about Visa's plans to increase fees and charges.
At that time, CFIB president and CEO Dan Kelly told Business in Vancouver that Canada has the second-highest level of merchandise fees in the world, totalling about $5 billion per year.