Canada is the latest to jump aboard the "let's attack Visa and MC and their high fees bandwagon." A new campaign, called "Stop Sticking It To Us" has been started by the Retail Council of Canada.I have an idea...albeit on the surface it seems to contradict itself. (see pic below) I believe the Retail Council of Canada has it backwards. There's a much easier way to get V/MC to "stop sticking it to retailers".
Rather than going after V/MC, retailers could simply increase the use of a solution that already at their disposal, to reduce these so-called "unfair fees!"Ironically, a "PIN"-based transaction boasts the lowest card fees, yet, despite it's name, the "PIN" transaction is the one that "won't stick us!"
If retailers, specifically Internet Retailers, truly want V/MC to "stop sticking it to them," they should be organizing a push for PIN debit and the lower fees and higher security it brings to the table.
Speaking of tables, we can reverse them to fight back and "Start Sticking It To Them". With what? Stick them with a PIN. Lower Fees, Highly Secure.
It's time for not only a change...it's time for PINterchange.If the most secure transaction has the lowest fees, PIN debit must be the most secure. It's physically impossible to have a card present (CP) transaction done on the web because the consumer, by virtue, cannot be there.
However, a PIN debit transaction brings a lower rate to the table than the CP rate anyway. HomeATM provides your online shoppers with a highly secure, personal magnetic stripe card reader...complete with a PIN Entry Device. End result? More secure transaction for them, lower rates for you.
Internet Retailers should be Pushing the PIN into the faces of Visa and Mastercard all day long. Need help? I volunteer. Email me and let me know that you'd like to utilize our services and I'll put together a plan designed to get Visa and Mastercard to allow you to accept PIN Debit for your e-commerce operation. Only members of the Top 100 Internet Retailers need apply. I'm of course kidding. EFT Payment Networks are certainly welcome to apply as well. But seriously, let me know that you'd like to cut your Internet Interchange fees and we'll get it done for you.
Moving on: Here's the press release on them asking V/MC to "please stop." instead of asking retailers to "please start."
Credit card companies are gouging retailers with transaction fees that cost $4.5 billion in 2007 — and the costs trickle down to consumers, the Retail Council of Canada warned Wednesday as it launched a campaign called "Stop Sticking It to Us."
The council's campaign was launched in conjunction with organizations such as the Alberta Liquor Stores Association, Canadian Booksellers Association and the Hotel Association of Canada. It was timed to coincide with the federal election, set for Oct. 14: the groups are calling on candidates to weigh in on credit card transaction fees.
The council estimates nearly $2 of every $100 Canadians spend using credit cards goes directly to Visa and MasterCard, and their issuing banks.
Most of money comes from so-called "interchange fees" that Visa and MasterCard banks collect from merchants every time a credit or debit card is used to pay for a purchase. The fee varies with the type of card and size of merchant, but is calculated as a percentage of the transaction.
"A $1 transaction and a $100 transaction costs about the same to process, yet the fee is based on a percentage of the total price of the sale — why?" asks a Derek Nighbor, vice-president of national affairs for the council.
(Editor's Note: Regarding that statement, with all due respect, on account of how I'm aware we should "love thy nighbor," in his position as VP of national affairs, Derek should have a better grasp on how the payments industry works, do some research, or maybe change his name to Peter Principal.)
It's not a problem only for merchants, Nighbor said, who pointed out that interchange fees eventually trickle down to consumers.
The Retail Council of Canada says that a large part of the interchange fee goes to cover the cost of credit card incentive programs, corporate credit card benefits and junk mail.
Meanwhile the Canadian Federation of Independent Business has launched a separate but related campaign. Shannon Martin, a spokesman for the CFIB, said the credit card companies and banks increased fees businesses must pay in May.
While personal credit card fees increased from 1.6 to 1.7 per cent, business fees increased significantly. "We had a member who in one month saw their processing fees … increase by over $1,200," he said. Martin noted that more increases are expected in October.
Credit card companies say fees are reasonable
In a statement released Wednesday, VISA said its interchange rates are reasonable.
"It is important to note that retailers and consumers do not pay interchange. Retailers negotiate what is called a Merchant Discount or Service Fee (MDR) directly with an acquiring financial institution. Visa Canada sets its local interchange rates in response to the competitive Canadian market and they are designed to encourage retail acceptance," the company said.
MasterCard also noted merchants choose to offer credit and debit card service because they offer good value. "Debit and credit cards represent convenient, secure and globally recognized forms of payment that enable billions of dollars in commerce for Canadian retailers and independent businesses annually," the company said. "Moreover, card payments are more cost-effective than handling cash or cheque.
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