Visa, MasterCard Face Credit Card Interchange Battle in Canada
May 10, 2012
Visa and MasterCard this week began to answer for fees the Canadian Competition Bureau calls “restrictive” and “anti-competitive” before the Competition Tribunal in Ottawa. At issue are the interchange fees set by Visa and MasterCard and charged by their issuing banks for processing credit cards. It can cost Canadian merchants 40 times more to process a credit card than a debit card, according to the bureau. an Interac debit transaction usually will cost a flat 12 cents regardless of the purchase price.
“Visa and MasterCard’s anti-competitive rules have essentially handcuffed small and medium-sized businesses, key engines for economic growth in Canada,” said Melanie Aitken, Commissioner of Competition. “Without changes to the rules, merchants will continue to face high costs for accepting credit cards, and all consumers, even those who use lower-cost methods of payment like debit or cash, will continue to pay higher prices.”
The Competition Bureau—an independent business watchdog group—first brought its application to the tribunal in December 2010, about a year after an investigation was launched in response to complaints.