Using debit cards to make point-of-sale purchases is extremely popular among Canadians. Established nationwide over 15 years ago, in 1994, the Interac direct payment system is so popular today that only Swedes, on a per-capita basis, make more such transactions.
However, the landscape is about to change, dramatically. VISA and MasterCard are entering the Canadian debit market. Their presence raises for policymakers issues involving the efficiency and fairness of the various elements that comprise a national debit card system, from the financial institution issuing the card through the payment networks, payment processors and merchants to the card-holding consumer. In short, the playing field is not even. VISA and MasterCard are largely unregulated when it comes to debit transactions, while the non-profit Interac association operates under the restrictions of a dated Competition Tribunal order.
