November 22, 2012


Major developments ahead in Canada's credit card industry:Competition Tribunal ruling on Visa and MasterCard expected any day

TORONTO---The Canadian Federation of Independent Business (CFIB) is pleased to see significant progress on two major problems in Canada's credit card industry and is watching for an imminent ruling from Canada's Competition Tribunal on an important case on Visa and MasterCard practices.

"When CFIB first proposed the Code of Conduct for the Credit and Debit Card Industry, we knew it would need regular updates and interpretation to address emerging issues," said Dan Kelly, CFIB president and CEO. "With the help of the federal government, we're pleased to see progress on two major issues affecting Canada's small- and medium-sized business owners - mobile payments and credit card sales practices. We're also anxiously waiting for a decision from the Competition Tribunal on a landmark case against Visa and MasterCard."

Mobile Payments: The Department of Finance has just closed consultation on how to ensure the Code of Conduct for the Credit and Debit Card Industry remains relevant as consumers can now make payments on their smartphones. CFIB has submitted its recommendations which include ensuring that merchants are not forced to accept mobile payments or features of mobile wallets without their express consent. "Government put forward some strong draft recommendations to address mobile payments, but time is of the essence to get ahead of a potential mobile payment fee grab," Kelly noted.

Credit Card Sales Practices: Earlier this year, CFIB rang the alarm bell that some sales agents for the credit card industry were working to trap small merchants in terrible credit card processing deals, often using separate lease agreements to increase fees to exorbitant levels. "On this one, CFIB wishes to compliment all the major card brands and the Financial Consumer Agency of Canada (FCAC) for taking these issues seriously and working on some practical solutions," Kelly added. "FCAC has just issued some draft guidelines that CFIB believes would go a long way to stop some of the unfair business practices that were creeping into the system."

Competition Bureau Case Against Visa and MasterCard: Late last year, the Competition Bureau filed a case against Visa and MasterCard alleging that certain of their practices were anti-competitive: specifically a prohibition on surcharging and requirements that merchants accept all types of cards regardless of cost. CFIB's support for surcharging in Canada was given a major boost when Visa and MasterCard settled out of court with US merchants to allow surcharging in early 2013. "We are expecting a ruling on this issue by the Competition Bureau any day now and will be crossing our fingers," Kelly said.

As Canada's largest association of small- and medium-sized businesses, CFIB is Powered by Entrepreneurs™. Established in 1971, CFIB takes direction from more than 109,000 members in every sector nationwide, giving independent business a strong and influential voice at all levels of government and helping to grow the economy.

The views expressed in this article are those of the Canadian Federation of Independent Business and are not necessarily those of Payments Business magazine, nor its editors, advertisers or readers. This article was written by CFIB and is presented to you in the spirity of open dialogue and fair voice for all parties.



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