New Democrats demand government action to prevent anti-competitive credit card practices

Competition Bureau files application to ban anti-competitive practices employed by VISA and MasterCard

Today, the Canadian Competition Bureau confirmed what New Democrats have been saying all along― VISA and MasterCard’s credit card practices are punishing businesses and ripping off consumers.

The Competition Bureau filed an application earlier today to strike down restrictive and anti-competitive rules that Visa and MasterCard impose on merchants who accept their credit cards. According to the Commissioner of Competition, Melanie Aitken, these rules have effectively eliminated meaningful competition between the two global credit card giants, resulting in increased costs to businesses, and ultimately, consumers.

“This decision underscores the need for concrete government action. The Voluntary Code put in place by the Finance Minister isn’t enough. While banks make record profits, Canadian merchants and consumers are still victimized by predatory credit card companies,” said NDP Consumer Protection critic Glenn Thibeault (Sudbury). “Rather than introduce concrete measures to protect Canadians, the Harper Conservatives, like the Liberals before them, are catering to Bay Street.”

The rules challenged by the Bureau prohibit vendors from encouraging consumers to consider lower cost payment options like cash or debit, and prohibit merchants from applying a surcharge to a purchase on a high cost card. Further, once a merchant agrees to accept one of Visa or MasterCard’s credit cards, that merchant must accept all credit cards offered by that company, including cards that impose significant costs on merchants, such as premium cards. In most cases merchants are forced pass along some or all of the lofty costs they are required to pay as a result of Visa’s and MasterCard’s anti-competitive practices.

“These monopolistic practices need to be corrected. They drive up costs for consumers and business, hindering the real drivers of Canada’s economy. The government needs to stand up for small and medium sized businesses by facing down the credit card companies. The implementation of a mandatory code of conduct with punitive sanctions for violators would be an important first step.”

Advertisements

%d bloggers like this: