Block V/MC from Debit System - Canadian Retailers

Canadian Retailers are really up in arms about Fees.  Here's an excerpt from an article from the Vancouver Sun. 

Block credit card companies from debit system: Retailers

OTTAWA — A leading business organization is calling on Finance Minister Jim Flaherty to use "moral suasion" to block credit card companies from entering the debit market so shoppers are shielded from higher price tags.

And if public pressure doesn't work, the Retail Council of Canada says Flaherty should exercise his power to regulate the payment system to protect retailers from seeing a "very substantial increase" in merchant costs, which would be passed on to consumers.

Interac has already applied to the Competition Bureau to restructure from a low-cost non-profit organization to a for-profit operation in anticipation of Visa Canada and MasterCard's move into the debit market.

"If government were to indicate that it was concerned about this, it was concerned about the cost this would impose on small businesses and on customers, I think the large banks would think very long and very hard before they bought in to the Visa and MasterCard model," said Peter Woolford, the retail council's vice-president of policy and research.

"Moral suasion has a role, so Visa and MasterCard might continue to try and sell their product, but the banks might look at it and say, 'Do we really want to infuriate all of our customers in order to make some money when we're already making money on the product we use today?'

"They might think twice before they say, 'We've got this great new product where we get to gouge you.'"

The retail council estimates merchant fees could more than triple if banks sign up with the debit systems of Visa or MasterCard. Currently, Interac fees for retailers range from about three to seven cents per transaction, depending on the size of the retailer. The fee does not change if the total bill for the transaction is higher, as is the case with credit-card transaction fees set by credit-card companies and paid to the issuing banks.

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Related:

Taking a Swipe at Debit Competition - The Star

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