FOR IMMEDIATE RELEASE – OTTAWA – The Public Interest Advocacy Centre (PIAC) questions the logic employed by the Minister of Finance that the two voluntary credit card proposals he accepted yesterday, “should ultimately result in lower prices for consumers.”
“While Visa and MasterCard did bring forward these proposals, the notion consumers will save significant money as a result of these agreements is questionable, given the lack of any mechanism compelling merchants or acquirers to pass on the proposed savings,” noted John Lawford, Executive Director and General Counsel of PIAC.
MasterCard has publicly stated, “All 700,000+ active MasterCard accepting merchants should benefit from such interchange reductions, dependent on acquirers implementing the changes and passing along these reductions.”
“Thus, in order for consumers to benefit from these proposals, the acquirers have to pass on savings to the merchants, and in turn the merchants have to pass on savings to the consumer- it’s a house of credit cards,” noted Lawford. Moreover the agreements themselves are voluntary, with each partner retaining the right to end the agreement without notice or penalty.
“We encourage the Minister of Finance to continue working towards permanent solutions to issues related to credit card interchange fees,” noted Jonathan Bishop, Research Analyst for PIAC. “We also encourage the annual verification of credit card interchange rates referred to by the Minister of Finance to be made publicly available, in the spirit of transparency, said Bishop.
For more information please contact:
Executive Director/General Counsel
Public Interest Advocacy Centre
ONE Nicholas Street, Suite 1204
(613) 447-8125 (cell)
Research & Parliamentary Analyst
Public Interest Advocacy Centre (PIAC)