Credit Card Rules Being Changed

Canada’s watchdog is expected to issue rulings within a few days that could shake Canada’s credit card industry, payment processors are trying to lock into contract that could be hard to break as well.

Federal Finance Minister Jim Flaherty is circulating a proposed voluntary code of conduct that would be able to give merchants more clout in dealing with credit card processors.

The federal Competition Bureau is expected to issue two landmark rulings that can possibly chance the payment industry landscape as we know it.

However, as the rules are beginning to change, merchants have noted that payment processors have increased their efforts to lock them into contracts that would be difficult to get out of.

Now we know that Visa Canada has noted that its debit cards will operate on its own debit network, and the existing Interac network and consumers will have the choice of which to use.

The warning issued by Visa Canada is that with so many regulations being made, it might do more harm than good.

The bureau is to rule within weeks on a request by domestic debt provider Interac to evolve from a non profit association owned by debit card issuers to a for profit business to help it compete with both Visa and MasterCard.

We have our federal watchdog investigating any allegations on Visa and MasterCard on whether they have abused their dominant position in Canada’s credit card market to limit competition and will announce shortly on what direction this will take.

The following week is bound to have more information on this topic, hopefully this matter will be sorted out soon.