Visa and MasterCard Co-badging
- Friday, October 30, 2009, 7:00
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Visa Canada came out to say that there is a big misperception that its new debit product is designed to rid Canada of its existing low cost service run by Interac Association.
Critics go as far as to say that Visa debit is putting non-profit Interac in a bind as they begin to compete in Canada’s $168 billion debit market.
Mike Bradley, Visa Canada’s head of products noted that the current monopoly is not sustainable because consumers are beginning to demand more innovation from debit.
Visa debit is meant to give consumers more utility, for example with Visa debit you will have international acceptance and a wider reach with online merchants.
Similar to Interac, there will be improved security through chip-enables cards and zero liability fraudulent purchases.
The problem with Visa and MasterCard coming into the debit card scene is that once they gain enough market share, Interac will cease to exist and fees might soar.
Finance Minister Jim Flaherty is hearing complaints about Visa and MasterCard taking advantage of the “co-badging” rule to gain on Interac.
Co-badging is used to offer complimentary services. Co-badging is now being used by Visa and MasterCard to compete in the market. While Visa and MasterCard cannot beat each other’s badges, it will be wearing Interac’s. This allows cards to use Interac as a backup if merchants are not signed up for Visa debit or MasterCard’s Maestro network.
The worrisome point of this is whether Visa and MasterCard will agree to share space with Interac on the same card once they gain enough market share.
Flaherty is expected to address co-badging when he releases his voluntary code of conduct for credit and debit.
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Sensei has written 1086 stories on this site.
My favorite weapon of choice is the samurai sword. I use it to cut my chicken during dinner, cut my hair and periodically carve my name into stone when I am bored. I love meditating on top of a 15ft high pole and eating those sushi’s with smoked salmon on top.
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