Canadian Credit Card System of Fees “Perverse,” Raise Prices: Competition Bureau

May 8, 2012

By Julian Beltrame, The Canadian Press

Canada’s credit card system is a perverse place where shoppers who pay with cash or debit subsidize purchases made with credit cards, the Competition Bureau argued Tuesday in its opening salvo against Visa and MasterCard.

That’s because Canadian merchants pay among the highest fess in the world for accepting credit cards and pass on the costs to consumers, the bureau’s lead counsel said in his opening to a tribunal charged with ruling on credit card practices.

Bankers’ counsel Mahmud Jamal told the tribunal the main reason for the complaint is that merchants simply want to create a “new profit centre” by charging more on certain credit cards.

Eliminating the no-surcharge rule, he said, “would be bad for the (card) issuing body, bad for customer choice and ultimately bad for consumers. It will, however, be good for merchants.”