Competition to Benefit Debit Card Market; Level Playing Field Needed: C.D.
Howe Institute

TORONTO , Feb. 4 /CNW/ - As new entrants arrive in Canada's debit card market, rule changes are needed to ensure a level playing field, and to enhance the potential benefits of competition for consumers and merchants. In "Change is in the Cards: Competition in the Canadian Debit Card Market," a study released today by the C.D. Howe Institute, policy analyst Philippe Bergevin assesses the implications of the rapidly changing debit payment landscape. Bergevin makes recommendations for action to ensure that consumers and merchants are protected and that the system can evolve to serve them even better.

With VISA and MasterCard entering the market, policymakers must resolve issues involving the efficiency and fairness of the payment system. VISA and MasterCard are largely unregulated when it comes to debit transactions, while the non-profit Interac association operates under the restrictions of a dated Competition Tribunal order. Bergevin makes three recommendations:

    
    -   remove current restrictions on Interac so that the association can
        evolve on a for-profit basis;
    -   minimize differences in rules and standards applied to payment
        systems; and
    -   implement a voluntary code of conduct that (i) enhances the level of
        transparency and disclosure to merchants, (ii) allows merchants to
        decline debit services for any transaction types, and (iii) allows
        merchants to provide discounts or surcharges related to type of
        payment.
    

For the study go to: http://www.cdhowe.org/pdf/backgrounder_125.pdf

For further information: Philippe Bergevin, Policy Analyst, C.D. Howe Institute, [phone]