Flaherty Pressed to Get Tougher on Behalf of Merchants
- Tuesday, November 3, 2009, 10:00
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Finance Minister Jim Flaherty has to raise consumer and merchant protections in the multi-billion dollar credit and debit market, by rooting out a slew of controversial industry practices, which includes double cycle billing, notes members of the Liberal caucus on Nov. 2nd.
The voluntary code of conduct that Flaherty is bringing out, supposedly does not go far enough to fix the problem at hand.
One of the larger problems is double cycle billing on credit card statements.
This occurs when banks calculate interest on the previous month’s total balance, rather than the remaining balance after a payment is made.
For example, if you charge $1200 on your credit card, and pay off $1000, you re still getting charged interest as if you paid nothing off.
Other points addressed, include that cardholder should be able to opt out of their card contract if the terms of the agreement are changed; this includes the interest rates.
Another problem being that online bill payments should be credited the very moment they are made, even if this happens on a weekend.
The Canadian Bankers Association has already begun to address concerns over premium cards.
It has been reported that Flaherty’s voluntary code of conduct will be unveiled soon, and it was noted that small business groups have pushed for such a measure.
On Visa Canada’s end, merchants have begun to negotiate lower expenses related to card acceptance.
MasterCard on the other hand has said that its debit offering called “Maestro” will be substantially cheaper than the existing Interac Association; however no figures have been released.
Visa Canada also disputed the Retail Council of Canada’s latest figures of Visa charging 30 cents to process an average $50 debit transaction. Visa says that its interchange fee amounts to just 17 cents in that instance.
With Flaherty’s voluntary code of conduct coming out soon, we should be able to an end to this conflict; well that is once the voluntary code of conduct does what it is supposed to.
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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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