TORONTO, Dec. 15 /CNW/ - MasterCard Canada said today that the Canadian
Competition Bureau's challenge of MasterCard Canada's rules, including
its no surcharge rule, which prohibits merchants from charging
customers extra when they pay with MasterCard credit cards, and its
honour all cards rule, which prevents merchants from discriminating
against different types of MasterCard credit cards, would, if
successful, have negative consequences for Canadian consumers. The
company believes that the Competition Bureau's legal claims are without
merit and will ultimately be rejected by the Competition Tribunal.
"If these changes were implemented by the Competition Bureau, the result
would be to enrich merchants at the expense of consumers," said Betty
DeVita, President, MasterCard Canada.
MasterCard Canada's prohibition against credit card surcharging is a
rule that protects consumers. It applies to Canadian merchants that
accept MasterCard credit cards and protects consumers by preventing
merchants from imposing an additional fee on consumers who choose to
pay with a MasterCard card. The rule has been in place in Canada for
more than 35 years.
Australia provides an excellent example of how surcharging harms
consumers. Since the Reserve Bank of Australia allowed surcharging in
2003, there has been increasing and unjustified surcharging of
consumers by certain merchants. In the U.S., credit card surcharges are
banned in 10 states, including New York, California, Florida and Texas.
The practice is also outlawed in 17 European Union Member States,
including France, Spain, Germany, Austria and Sweden.
Under MasterCard Canada's rules, merchants are free to offer discounts
or other inducements to customers who pay by cash, debit or any other
means as a way to reduce their costs of credit card acceptance.
MasterCard Canada is of the view that this gives merchants the pricing
flexibility they require, while protecting consumers from the negative
consequences of surcharging. These include practices that have been
observed in Australia, including "bait and switch" pricing tactics and
MasterCard Canada's honour all cards rule prevents merchants from
picking and choosing which MasterCard credit cards they will accept.
If the Bureau were successful in challenging this rule, it would mean
that consumers would not know if their MasterCard credit cards would be
accepted until they attempted to make a purchase, even though the
merchant displayed the MasterCard acceptance logo. This could undermine
consumers' confidence in, and their ability to use, MasterCard cards as
a form of payment. No jurisdiction in the world has banned the honour
all cards rule.
MasterCard Canada intends to defend its no surcharge and honour all
cards rules in the proceeding before the Competition Tribunal and looks
forward to demonstrating how its rules benefit both consumers and
merchants in Canada. The Competition Bureau does not seek any penalty
or damages from MasterCard.
Canada's credit card industry helps facilitate more than $240 billion in
commerce annually for Canadian merchants, big and small. Merchants pay
a relatively small fee for participating in the credit card system. In
return for this fee, merchants enjoy significant value, including
increased sales, guaranteed, secure and nearly immediate payments, and
access to millions of Canadian and hundreds of million U.S. and other
cardholders both in-store and online.
MasterCard Canada believes merchants should pay their fair share of the
cost of credit cards, and should not be able to pass on these costs to
consumers through higher prices.
About MasterCard Worldwide
As a leading global payments company, MasterCard Worldwide prides itself
on being at the heart of commerce, helping to make life easier and more
efficient for everyone, everywhere. MasterCard serves as a franchisor,
processor and advisor to the payments industry, and makes commerce
happen by providing a critical economic link among financial
institutions, governments, businesses, merchants, and cardholders
worldwide. In 2009, $2.5 trillion in gross dollar volume was generated
on its products by consumers around the world. Powered by the
MasterCard Worldwide Network - the fastest payment processing network
in the world - MasterCard processes over 22 billion transactions each
year, has the capacity to handle 140 million transactions per hour,
with an average network response time of 140 milliseconds and with
99.99 percent reliability. MasterCard advances global commerce through
its family of brands, including MasterCard®, Maestro® , and Cirrus® ;
its suite of core products such as credit, debit, and prepaid; and its
innovative platforms and functionalities, such as MasterCard PayPassTM and MasterCard inControlTM. MasterCard serves consumers, governments, and businesses in more than
210 countries and territories. For more information, please visit us at
www.mastercard.com. Follow us on Twitter: @mastercardnews.
Statements in this press release which are not historical facts,
including statements about MasterCard's plans, strategies, beliefs and
expectations, are forward-looking and subject to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements speak only as of the date they are made.
Accordingly, except for the company's ongoing obligations under the
U.S. federal securities laws, the company does not intend to update or
otherwise revise the forward-looking information to reflect actual
results of operations, changes in financial condition, changes in
estimates, expectations or assumptions, changes in general economic or
industry conditions or other circumstances arising and/or existing
since the preparation of this press release or to reflect the
occurrence of any unanticipated events. Such forward-looking
statements include, without limitation, statements related to: (1) the
likelihood that the Canadian Competition Bureau's challenge of
MasterCard's rules, if successful, would have negative consequences for
Canadian consumers; (2) the possibility that the Canadian experience
with surcharging would track the experience in Australia; and (3) the
likelihood that the legal claims underlying the Canadian Competition
Bureau's challenge will ultimately be rejected by the Competition
Actual results may differ materially from such forward-looking
statements for a number of reasons, including those set forth in the
company's filings with the Securities and Exchange Commission (SEC),
including the company's Annual Report on Form 10-K for the year ended
December 31, 2009, the company's Quarterly Reports on Form 10-Q and
Current Reports on Form 8-K that have been filed with the SEC during
2010, as well as reasons including difficulties, delays or the
inability of the company to achieve its strategic initiatives set forth
above. Factors other than those listed above could also cause the
company's results to differ materially from expected results.
SOURCE MasterCard Canada
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