Madam Speaker, the member raised a serious issue with respect to the interchange fee.
However, I would caution the member. Since this issue has been raised with me by the CFIB, the retail council and the restaurant and food association, I have looked into what is known as a four-party credit card model. This is a very technical model in Canada and also around the world in terms of how credit cards and their markets work. We have the merchant, a payment processor, the acquirer, the card issuer, the cardholder and the credit card company.
I also point out, though, that the interchange rate is part of the merchant discount rate. Merchants and retailers are concerned about the interchange rate, but they are probably more concerned about the merchant discount rate. In many cases we do not know the merchant discount rate because we need to have the consent of retailers to get that. I asked the retail council today whether we could get more information on that and it said it would gladly provide it.
With respect to the interchange rate, my understanding is that it is about 1.5%, so about 98.5% stays with the retailer and 1.5% is with the interchange. Whether that ends up with the credit company, or with the financial institution or the processor is one of the issues at which the committee will have to look. The interchange rate plus the other costs make up the merchant discount rate.
The member raised the issue of premium cards. It is, in fact, true that for premium cards a higher rate is applied. American Express is the highest premium card. It charges such a high rate that in many cases many retailers do not even carry the card. We should look at this issue.
In terms of Canadians receiving these cards without their consent or without full information, a committee could legitimately look at and perhaps some action could be taken.
As the minister has explained in the House, the economic action plan we have passed enables him to regulate in many of these areas with respect to better informing consumers about the products they are buying.
My final response to the member would be that this model and the system that is in place is of a complicated nature such that it makes sense for members of the House of Commons committee and the Senate committee to look at this over the next month and report back to the House with some recommendations or actions that the government could take, in addition to the measures we have already taken.