Canada: Visa, MC bow to swipe-fee pressure

Credit card giants Visa and MasterCard have reportedly reached an agreement with Canada to lower what officials say are some of the highest swipe-fees in the world.

Reports say the companies will reduce interchange fee rates by about 10 percent, capping them at an average 1.5 percent on credit cards. Canada’s finance department announced the companies’ proposals on Tuesday.

The swipe-fee caps would take effect by April and last for five years.

According to reports, Canada’s interchange fees are some of the highest found in the world. Competition authorities in several nations, including Canada, have pursued legislation to limit the fees on grounds that they are anticompetitive.

Canada’s Competition Bureau has tackled the issue on claims Visa and MasterCard harm competition by barring retailers from encouraging shoppers to use cheaper payment methods. The authority filed a lawsuit against the firms in 2010, but the case was dismissed in 2013 in favor of a resolution through a new https://www.competitionpolicyinternational.com/payment-card-regulation-and-the-use-of-economic-analysis-in-antitrust-3 regulatory framework.

Despite the apparent agreement, Visa said that it reserves the right to end or change the proposal if either the company or is clients are found to be at a disadvantage from the fee caps.

Full content: Bloomberg

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