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The Retail Council of Canada has asked Finance Minister Jim Flaherty to block Visa Canada and MasterCard Canada from entering the country's PIN-debit card market because their entrance would create higher prices for consumers, according to published reports. The Toronto-based council estimates merchant fees would more than triple if banks sign up with Visa's and MasterCard's debit systems, according to published reports. In turn, the merchants would pass on the higher fees to their customers, the council contends. The Finance Minister office, however, does not plan to intervene. "The government aims to have a financial sector regulatory framework, which promotes competition and innovation. The government does not regulate the day-to-day business practices of financial institutions, including fees," the department wrote in a statement. The Retail Council, which represents 40,000 retail outlets in Canada, did not respond to calls for comment from ATM&Debit News, a CardLine sister publication. The Canadian debit market, however, is undergoing a metamorphosis. In anticipation that Visa and MasterCard banks will issue debit cards, the Interac Association, which has a monopoly on Canada's PIN-debit card market, has applied to the Canada Competition Bureau to change from being a low-cost nonprofit to a for-profit business. The Interac Association manages Interac Direct Payment, Canada's national debit service for purchasing goods and services. All debit cards now issued in Canada require cardholders to enter PINs for purchases and ATM withdrawals. Four banks and a credit union¬¬–Royal Bank of Canada, CIBC, Scotiabank, Toronto-Dominion Bank and Desjardins–founded Interac in 1984. All of the banks are Visa credit card issuers. Both Visa Canada and MasterCard Canada say they will issue statements later today concerning the retail council's statement.
