Evidence of meeting #141 for Industry, Science and Technology in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was stripe.
A recording is available from Parliament.
October 24th, 2024 / 8:45 a.m.
Director, Public Policy, Stripe
Well, both regions have different policies that affect interchange costs.
Liberal
Chandra Arya Liberal Nepean, ON
Okay. If I say it is 0.5% in the European Union, am I closer to the correct number?
Director, Public Policy, Stripe
The average interchange in Europe is approximate to that.
Liberal
Chandra Arya Liberal Nepean, ON
Why is it so high in Canada? Why does it have to be so high in Canada?
Director, Public Policy, Stripe
I don't think there's anything that suggests it has to be so high here either.
Liberal
Chandra Arya Liberal Nepean, ON
When the government makes what you call small changes—the government may disagree—why are you unwilling to pass on those small changes?
Director, Public Policy, Stripe
It is such a small amount that if you ask a small business whether they would prefer to lose a simple, predictable price or take what in many cases on average would be just—
Liberal
Chandra Arya Liberal Nepean, ON
Mr. Peters, I too came from business. I understand. Standard pricing is an easy thing to understand. To make a small change is also easy. Again, you can give it to all across the customers' base.
Anyway, with my limited time, Mr. Brownlee, what are the average annual sales of your members?
Vice-President, Stakeholder Relations, Convenience Industry Council of Canada
For annual sales, average sales are about $2.4 million. When you average it out, it does skew because there are small of small and large of large, but the average is $2.4 million.
Liberal
Chandra Arya Liberal Nepean, ON
You listened to Mr. Bossin of Interac. Do you agree with him that they have been much appreciated by the small businesses?
Liberal
Vice-President, Stakeholder Relations, Convenience Industry Council of Canada
Absolutely.
Liberal
Chandra Arya Liberal Nepean, ON
Good. What is there that we can do to increase those transactions? Obviously, we can't go back to cash.
Vice-President, Stakeholder Relations, Convenience Industry Council of Canada
That's consumer driven. Let's be honest. When you get one and a half times the points for filling up at a gas pump, you're going to use your credit card, plain and simple. Of course, from our perspective, as I mentioned earlier, in the example this summer in Atlantic Canada, the retailers were offering a huge discount to those not using a credit card for gas.
Liberal
Chandra Arya Liberal Nepean, ON
Mr. Alexandre Lampron mentioned that. He rightly said, and I agree with him, something to the effect that the points and rewards must be paid by the ones who benefit, not by the ones who don't benefit or who don't care about it, right?
Vice-President, Stakeholder Relations, Convenience Industry Council of Canada
In theory, yes.
Liberal
Chandra Arya Liberal Nepean, ON
What is it we can do to change the system there? Right now, a campaign has been started by the institutions who have the money power to launch an email campaign, saying, “I don't mind paying high fees. Protect my points.” I know that is something that has been pushed by certain segments, but that is not the general view of the people.
Mr. Peters, do you pay income tax in Canada for all the revenue you generate in Canada?
Director, Public Policy, Stripe
I'm not part of our tax team. I would actually like to get you that information if it's okay.
Liberal
Chandra Arya Liberal Nepean, ON
Please get me that information. Thank you.
My last question is for Interac.
What is it the government can do to encourage more Canadians to use systems like Interac?
Head, Government Relations and External Affairs, Interac Corp.
At Interac, our focus is on helping Canadians to access their money from their bank account and to pay or transfer money in ways that they would like. As I said, we've been working to implement different solutions, including mobile payments.
Liberal
Chandra Arya Liberal Nepean, ON
Can you tell us what it is the government can do to increase awareness of the usage of systems like Interac?
Head, Government Relations and External Affairs, Interac Corp.
Something that we focus on each and every day at Interac is how we help make sure there's awareness of options to pay. We work with organizations, as I said, like the CFIB to get the message out there to help businesses understand the options they have available to them and how to accept payments with Interac that support their business.
Liberal
Bloc
Jean-Denis Garon Bloc Mirabel, QC
Thank you, Mr. Chair.
I would like to welcome all the witnesses and thank them for being with us today.
Mr. Lampron, before asking you a question, I am going to begin with an introduction. When I hear the government say there have been agreements with Visa and Mastercard to lower interchange fees, I feel like I am in a Kafka novel where we are made to believe that prices are going down. When I hear my Conservative colleagues ask why Stripe has not granted merchants cost reductions, I feel like I am living in a science fiction movie. There was no agreement. The government simply asked the credit card issuing companies nicely to propose something, and it accepted more or less anything so as not to have to regulate.
Mr. Lampron, your organization has been asking for interchange fee regulations for years, in every pre‑budget consultation, and the Bloc Québécois supports you.
I am going to ask my question in the form of an example. All these agreements between Visa or Mastercard and merchants apply only if a business has sales totalling over $175,000 or $300,000. Suppose you have a restaurant. You have 20 tables with four seats per table. You serve meals three times a day, which makes 240 meal services a year. You are open six days a week, 50 weeks a year, which makes 300 days a year. So you serve 72,000 meals a year. To be eligible for the agreement with Mastercard, you have to sell each of your meals for $2.43 or less. To be eligible for the agreement with Visa, a more generous and magnanimous company, each of your meals has to cost less than $4.16.
Can you confirm that these agreements are smoke and mirrors, that the government simply decided to mislead the public and let people believe it had done something, and that as of today, the issue has absolutely not been resolved?
