September 4, 2009

• News:  Canadian Retailer Talk Of New CC Program

  Retailers are fed up with the bullying tactics of credit card giant networks, Visa and MasterCard. While credit card companies, merchants, and Americans have fought the battle of high interchange fees which are totally controlled by the card networks like Visa and MasterCard, networks enjoy a continuous flow of earnings and profits. Interchange fees are the fees merchants pay each time a customer uses his debit or credit card in a payment transaction. A portion of the interchange fee is paid by the merchant's bank and a portion is paid by the end consumer's bank. Legislation is circulating in the House and Senate that would give merchants the right to be part of the interchange negotiations procedures. Meanwhile, a prominent retailer in Canada is planning to take matters into their own hands.

  Alimentation Couch-Tard Inc., based out of Montreal, is North America's second largest independent convenience store operations. They are Canada's largest chain and operates over 5,000 locations across the U.S. and Canada. In addition to the Couche-Tard brand, the company operates under the Mac's Convenience Stores, Circle K stores, and Exxon Mobil On the Run stores. The company's President and Chief Executive Officer, Alain Bouchard, released a statement on Wednesday of a new credit card initiative that would halt Visa and MasterCard in their tracks. Bouchard said the plan is aimed at stopping the "out of control, exorbitant fees for electronic payment." The convenience store chain hopes other retailers will join in their efforts to stand up against the credit card giants to accomplish this mission.

  Mr. Bouchard did not give exact specifics of the plan; however, did indicate that it involves the group of retailers and other businesses throughout Canada and the U.S. developing their own credit card. The card would offer a rewards program and would be structured similar to existing airlines and travel deals and incentives. The card would come at a lower cost for merchants and closer to 0.5% versus the current approximately 2% per transaction. Couche-Tard's annual debit and credit transaction fees have nearly tripled over the past three years, from $63 million in 2005 to $180 million in 2008. That 1.5% difference would add up to a significant amount of savings.
  
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