The Consumers Council of Canada believes the undertaking announced today by Visa and Mastercard and accepted by Canada’s Department of Finance to reduce credit card interchange fee rates is a measured response to concerns about transaction costs to the Canadian economy and a constructive development for consumers, businesses and the payments networks, themselves.
“The Government of Canada should closely monitor the impact of the undertaking on Canadian consumers,” said Consumers Council of Canada President Aubrey LeBlanc. “The government should watch carefully for whether innovation and emerging competition in payments systems leads to both improved service and cost effectiveness for consumers. There is a risk the changes will lead card issuers to assess higher membership fees and interest rates, and lowered rewards.”
Accordingly, the Council is hopeful the public policy discussion can re-focus on:
- issues concerning the cost, risks, responsible use and attached services and service conditions of real-time credit and debit arrangements; and
- orderly assimilation of innovations within the system of payments likely to benefit consumers and the economy.
“Consumers value many of the innovations being introduced to the world of electronic payments,” said LeBlanc. “They especially value improvements that make transitions more efficient, comprehensible and cost effective. However, as is so often the case during periods of change, there is a need for the industry, regulators and consumer representatives to work together and be nimble in avoiding possible abuses or unintended adverse consequences.”
The Consumers Council of Canada has had a long-term commitment to protecting consumers in the system of payments, both through formal representation at the Canadian Payments Association and at the Financial Consumer Agency of Canada. To inform its representation, the Council conducts research on topics concerning impacts on consumers of financial services and within and associated with the system of payments. The Council’s ongoing and completed research topics are available on its website at: http://www.consumerscouncil.com/current-research and http://www.consumerscouncil.com/recent-reports
Also, the Council welcomes input from individual consumers about their experiences in the marketplace of all kinds to help inform its consumer representation. Individuals are encouraged to share their experiences through the Council’s website at: http://www.consumerscouncil.com/tell-us-your-consumer-experience/