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The Canadian House of Commons Standing Committee on Industry, Science and Technology will investigate Canada's debit card payment system and credit card interchange rates, Anthony Rota, the committee's vice chairman, tells ATM&Debit News, a CardLine sister publication. Committee members voted yesterday to launch an investigation after the Interac Association, Canada's sole debit network, announced plans to change its organizational structure from a not-for-profit to a for-profit business to compete with Visa Canada and MasterCard Canada, both of which say they plan to enter Canada's debit card market (CardLine, 3/4). "[Interac's] announcement has created a slew of issues, and we want to investigate interchange rates between banks and merchants," Rota says. "If the rates increase, we want to know how they will affect consumers and small businesses and if we should have some regulations in place." Small-business owners oppose opening the market to Visa and MasterCard. The Retail Council of Canada, which represents 40,000 retailers, claims merchant fees would more than triple if banks begin to issue Visa's and MasterCard's debit cards. In turn, the merchants would pass the higher fees onto consumers, the Toronto-based council says. Greg Kolz, Rota's legislative aide, says the hearings likely will begin in April. The hearings will last several weeks, says Rota.
