Visa Canada insists the Canadian Competition Bureau’s legal challenge to eliminate the company’s consumer-protection policies has no merit and would be harmful to consumers.
Visa Inc. and MasterCard Worldwide prohibit Canadian merchants from applying a surcharge to a purchase made with a high-cost card, and the bureau is asking that the ban be lifted.
Last month, the bureau filed an application with the Canada’s Competition Tribunal and alleged Visa and MasterCard impose restrictive and anticompetitive rules on merchants who accept their credit cards.
The bureau filed the application to challenge certain rules of the card brands under the price-maintenance provisions of the Competition Act. Lawmakers designed the antitrust law to maintain and encourage fair competition in Canada (
The card brands’ rules result in increased costs to merchants who, in turn, pass their costs to consumers, Melanie Aitken, the bureau’s commissioner, noted in a statement. Canadian merchants pay an estimated $5 billion annually in hidden credit card fees, the bureau claims.
“Without changes to the rules, merchants will continue to face high costs for credit card acceptance, while consumers, even those who use lower-cost methods of payment like debit or cash, will continue to pay higher prices,” Aitken said.
The bureau wants to give merchants the ability to surcharge consumers using credit cards to make up the costs associated with accepting them.
Visa Canada says it created its no-surcharging policy to specifically prevent retailers from imposing a fee on consumers who choose “the convenience, security and reliability of Visa cards over cash and checks.”
MasterCard Canada also has expressed its concerns over the proposal.
“If these changes were implemented by the Competition Tribunal, the result would be to enrich merchants at the expense of consumers,” Betty DeVita, MasterCard Canada president, told PaymentsSource in a statement last month.
MasterCard’s surcharge ban is intended to protect consumers, the company contends.
MasterCard claims surcharging has hurt consumers in other countries, particularly in Australia. “Since the Reserve Bank of Australia allowed surcharging in 2003, there has been increasing and unjustified surcharging of consumers by certain merchants,” the card brand said in its statement.
Visa says the surcharges in Australia are as high as 10%, citing a November survey commissioned by the New South Wales Minister for Fair Trading.
What do you think about this? Send us your feedback.
