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12/10/2009 -
In what is expected to be a complement to his recently introduced credit card regulations, finance minister Jim Flaherty has announced that he is in the process of developing a "voluntary code of conduct" for MasterCard and Visa's entry into the Canadian debit card processing market.The lenders are creating quite a stir in the Canadian payment processing industry, as their presence in the market will likely challenge the low Interac fees that merchants now pay for debit card transactions.
To quell some of the controversy, Flaherty is asking Visa and MasterCard to have a "more definitive" fee schedule and to have fair priority routing of debit card transactions, the Toronto Star reported.
Currently, Visa said that it will give consumers the option to run their debit card transaction over the Visa network or the Interac network, while MasterCard processing will automatically run over the company's Maestro network, the newspaper reported.
This routing may result in higher fees for merchant accounts, especially as Visa and MasterCard are tempting consumers with rewards that Interac does not have.
However, the introduction of Visa and MasterCard into the Canadian payment processing market may not be completely detrimental to merchants.
One payment processing expert recently told The Green Sheet that Canadian merchants may be able to increase their sales volumes by 30 percent to 40 percent if they accept Visa and MasterCard debit cards.
