Melanie Aitken and the lawyers of the Competition Bureau are throwing everything they’ve got at Visa and MasterCard these days. Ms Aitken is the Commissioner of the Bureau and since her appointment by the Conservatives in 2009 she has proven herself to be a strong defender of the consumer. At stake in the current round of hearings in Ottawa is the way the two main credit card companies charge merchants rates that are, as the Bureau puts it, among the highest in the world. The Bureau thinks that properly competitive rates would save merchants and consumers some $5 billion a year. More than that, says Aitken’s chief counsel Kent Thomson, Visa and MasterCard are running a “perverse” system that extracts unreasonable fees. The issue has come to a head as the two leading card companies have decided to produce so-called premium cards which set fees of up to three-percent of the amount of each transaction. This is the way American Express does it and the allure of giving people “gifts” purchased with their own money was just too much for Visa and MasterCard. Did somebody say there’s no free lunch? Retailers have lobbied for permission to tack a surcharge on purchases, so customers would be more aware of the costs. But the contracts offered by the major credit firms prohibit any such surcharges. They also forbid retailers from selectively accepting only credit cards from the same company with lower fees and denying customers with so-called premium cards.Melanie Aitken vs Visa and MasterCard
by •
Melanie Aitken and the lawyers of the Competition Bureau are throwing everything they’ve got at Visa and MasterCard these days. Ms Aitken is the Commissioner of the Bureau and since her appointment by the Conservatives in 2009 she has proven herself to be a strong defender of the consumer. At stake in the current round of hearings in Ottawa is the way the two main credit card companies charge merchants rates that are, as the Bureau puts it, among the highest in the world. The Bureau thinks that properly competitive rates would save merchants and consumers some $5 billion a year. More than that, says Aitken’s chief counsel Kent Thomson, Visa and MasterCard are running a “perverse” system that extracts unreasonable fees. The issue has come to a head as the two leading card companies have decided to produce so-called premium cards which set fees of up to three-percent of the amount of each transaction. This is the way American Express does it and the allure of giving people “gifts” purchased with their own money was just too much for Visa and MasterCard. Did somebody say there’s no free lunch? Retailers have lobbied for permission to tack a surcharge on purchases, so customers would be more aware of the costs. But the contracts offered by the major credit firms prohibit any such surcharges. They also forbid retailers from selectively accepting only credit cards from the same company with lower fees and denying customers with so-called premium cards.