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Canada's Competition Bureau this month announced it is lifting its longtime restriction against card issuers offering customers both Visa- and MasterCard–branded credit cards. The Gatineau, Quebec-based agency, which promotes competition and customer choice, previously forced financial institutions to pick one credit card brand or the other. It was concerned issuers might wield too much influence over both Visa's or MasterCard's competitive decisions when both card networks were structured as associations. The new policy becomes effective immediately in light of the fact that Visa and MasterCard became independent companies within the last two years, the bureau said. "Because of the restructurings, issuers and acquirers are no longer involved in most of the governing decisions of the major credit card networks," Sheridan Scott, the bureau's commissioner, said in a statement. Adil Moussa, an analyst with Boston-based Aite Group LLC, tells CardLine the new development instantly creates another competition front for Visa and MasterCard. "For decades card issuers and consumers have had to work around the fact that each bank was forced to align its credit and ATM products and merchant-acquirer relationships with either Visa or MasterCard. It created a lot of hassles, but the landscape in Canada will change a bit now." A spokesperson for Toronto-based Interac Association, a nonprofit association enabling debit and ATM transactions in Canada, says the development will intensify card-network competition in North America. "This change enables financial institutions to choose freely between an expanded combination of debit and credit payment options for their customer base," the spokesperson said in a statement. The policy change affects only credit cards.
