TORONTO, June 21, 2012 /CNW/ - Canadians are avid users of debit cards,
credit cards and online payments, but our payment system needs reform
to spur innovation, according to a report released today by the C.D.
Howe Institute. In "Debit, Credit and Cell: Making Canada a Leader in
the Way We Pay," authors Philippe Bergevin and Todd Zywicki argue the
country's current payment technologies and governance infrastructure
must change, or we will fall further behind the rest of the world. "We
must remove barriers to competition and risk-taking," said Philippe
Bergevin, Senior Policy Analyst at the C.D. Howe Institute, "and
encourage innovation to keep pace with the global economy."
Canadians already have fewer options than consumers in other countries,
note the authors. Cell phones with payment capabilities have been
around for years in some countries, and are only starting now to make
inroads in Canada. Cheques, which are relatively costly and slow to
clear, are still widely used, with about one billion of them written
annually. And Canadian debit cards lack features taken for granted in
other parts of the world, such as the ability to use them for many
online transactions and at stores located abroad.
The authors argue that the nation's main debit network, the Interac
Association, which operates as a cooperative under a Competition Bureau
consent order, should be allowed to compete on a for-profit basis.
Also, limits on the number of networks that can coexist on debit cards
should be removed—such bans are detrimental to effective competition
While the authors reject the idea of adding further layers of agencies
tasked with regulating the payment system - as proposed by a recent
federal task force - they do see a role for the federal government in
guarding against systemic risks and ensuring appropriate levels of
information and disclosure.
The C. D. Howe Institute is an independent not-for-profit research
institute whose mission is to raise living standards by fostering
economically sound public policies. It is Canada's trusted source of
essential policy intelligence, distinguished by research that is
nonpartisan, evidence-based and subject to definitive expert review. It
is considered by many to be Canada's most influential think tank.
For the report go to: http://www.cdhowe.org/debit-credit-and-cell-making-canada-a-leader-in-the-way-we-pay/18095
SOURCE C.D. Howe Institute
For further information:
Todd Zywicki, Academic Affiliate, International Center for Law and Economics and Professor of Law, George Mason University; or Philippe Bergevin, Senior Policy Analyst, C.D. Howe Institute, 416-865-1904; email: firstname.lastname@example.org.