Governments really need to break the Visa and Mastercard Duopoly.
Not mentioned in this article, but certainly related, was the Canadian governments unprecedented step to freeze hundreds of bank accounts of protestors during COVID protests using their Emergencies Act. While I couldn't be more politically removed from the protestors, using a legislative power envisioned for war like conditions to personally ruin protestors financially is more than worrying.
Canada's credit cards work on Visa, MasterCard, or Amex networks. However, debit cards work on a domestic network called Interac. About half of card transactions in Canada are debit card transactions.
EDIT: In the past few years, many Canadian banks have started issuing dual-network debit cards that bear both Visa and Interac logos (sometimes MasterCard and Interac). These cards use the Interac network in Canada, but can also be used online and abroad using the second network. I just wanted to mention it for people who may be curious about the apparent shift in debit card networks.
Sounds like a mirror of the Girocard here in Germany. My bank card now has both girocard and visa on it, and works online.
Allegedly, Wero, coming from the banks of the EU, should in the next year or two, unite all the similar national systems across Europe in to one, I guess kind of like UnionPay.
Same in Norway, we've always had BankAxxept and Visa on debit cards and most credit cards have been Mastercard. BankAxxpet handles the vast majority of transactions.
The dual-network cards are Visa/Mastercard "debit" cards, which look like a credit card but sometimes don't work like one. I never had a problem with my dual-network card when physically visiting the States, but for whatever reason, some online payment systems (especially ones in Canada) have trouble with it. And vendors are clueless as to what the problem is when the debit CC number fails to go through.
Just recently I tried to pay at a parking kiosk with my dual-network card, and it repeatedly failed with a generic error. So I had to use my credit card (which I only got for this kind of situation) instead.
So often when trying to pay with a CC number, only a credit card will work. It's pretty dumb.
>some online payment systems (especially ones in Canada) have trouble with it.
it's not really anything technical that they "have trouble with", most gateways launched visa debit as an "opt-in" payment method for existing merchants, so if the merchant did not specifically enable it it never got enabled. newer merchant accounts have it enabled by default, so this should sort of work itself out over time. but yes, i don't understand why they made merchants opt in, it's pretty dumb.
EU/Finland has used debit+credit combination cards over 21 years.
20 years ago the card type caused confusion going abroad, especially US, but also some European countries that had not yet introduced the same card type. Some merchants were confused about the extra prompt about which card to use before the customer enters the pin.
But it has worked fine 99% of exotic places. I think the 3D secure caused much more trouble when shopping online when it was introduced compared to the choice of using either the debit vs credit variant online.
Fees are lower for the merchant. As a result it is less likely to see a 50c surcharge to use a card with debit. Places like convenience stores often only have debit.
Personally I use credit for anything major, for the protections.
People who have poor credit can use debit if they can’t get a credit card, or want to make a purchase above their limit.
I am not Canadian but I am irresponsible and a debit card lets me just spend in a relatively stateless fashion. Check online account, if money can spend, otherwise not. I change the card numbers pretty often so not too worried about fraud. I use PayPal for recurring payments/subscriptions.
I just want to pay for things. I'm not interested in spending money I don't have. And credit cards are obviously waiting to pounce on me if I forget to pay the balance, and charge an insane amount of interest. I don't need the added complication.
Sure, that's one way to look at it. But I set my credit card to pay off the entire balance every month so I don't worry about any of those concerns. But, I also get the benefits that most cards offer (automatic extended warranties, purchase protection, price protection, etc).
We are sleepwalking toward an absolute totalitarian panopticon in the name of convenience. The cashless thing is just a tiny part.
I had little to no sympathy with the protestors either but that definitely crossed a line, and do we really think that will only ever be used against those kinds of protestors. I’m sure it will happen at some point to indigenous people protesting an oil and gas project or something. It’s now a tool in the arsenal to crush protests.
It’s actually super easy to do but the public will hate it. Pass a law that credit card surcharges MUST be added onto the final price.
That 2% cashback you get for using your Amex isn’t due to Amex generosity. That’s literally what retailers pay.
Right now I will absolutely use my cc for anything I can. It’s literally cheaper than cash and users of cash subsidise all my purchases. The only way to fix this is to force the surcharges on the cc users so cash users aren’t subsidising the price. But good luck getting that passed as law. Everyone either doesn’t care or thinks they are getting an amazing deal from the 2% back. It’s got to the point where stores that add a cc surcharge will be called out on social media when all they are doing is preventing cash from subsidising credit cards.
That seems like it would get complicated fast. Doesn't cash have its own additional handling costs that don't apply to credit card users? I'm not sure it's as easy as saying cash users are subsidizing anyone else.
And the cost of staff pocketing some of it, and the cost times risk of it being stolen, and the psychological impact to employees of the store being worth robbing...
You forgot cash pickup and delivery costs for big stores or sending two employees to the bank with the day’s revenue (that’s the cost a lot of cash-only merchants in Germany usually don’t calculate for). Also don’t forget the counting of the day’s cash, two employees 30 minutes each.
Nope, in Australia this is now the law and it hasn't stopped the CC duopoly at all. In fact it seemed to benefit it, as small merchants who used to not accept cards for small payments now just don't care since they pass the fees on to the customer. It turns out that most people just don't care about a 1% surcharge.
edited: ignore this comment please, I totally misunderstood the comment!
> Pass a law that credit card surcharges MUST be added onto the final price.
You must be a rich person that supports monopolies! And clearly you know nothing about low margin retail businesses. If your profit margin is 5% and the credit card fees are 2.5% then you are saying profit should be split 50%/50% with Visa/Mastercard.
In New Zealand originally the contract between the credit card company and the marchandiser said that the marchandiser couldn't charge a different amount for cash - an indirect way to force retailers to soak up the credit card fees. That clause was eventually outlawed here, for good reason. Your suggestion is to write the opposite law!
The extra fees for credit cards are great. It is the customer's choice to pay them or not!
That’s exactly what I’m proposing though. Right now it’s cheaper to pay by credit card because I don’t pay the surcharge directly, it’s paid by all customers including cash customers. I have no choice but to pay by credit card. My proposal above is exactly what is required to make cash a choice.
Btw did you read some idea that the surcharge applies to all purchases? The idea of charging the credit cards a surcharge equal to the surcharge they take from the retailer is better for all except the big credit card companies. Customers can use cash without subsidising the credit card users, credit card users can still use credit cards but they won't get ahead vs cash, retailers don't have to absorb the surchage (and ultimately partially pass it on to cash customers).
Most countries should study the Brazilian system called Pix. It's faster than Interac, controlled by the central bank and very accessible to its population.
https://www.bcb.gov.br/en/financialstability/pix_en
The MOU was no more an overthrow than people proposing any policy.
IF protesters request the government set up a community oversight board for the police or build a playground, that wouldn't not be overthrow either.
I have seen the MOU linked several times, but nobody has ever made a coherent argument how it constitutes treason, overthrow, or anything else of that nature.
It is a simple list of demands from protesters, primarily that the government drop vaccine mandates and vaccine passports.
The protestors wanted the "Federal Government" to enforce their versions of laws in the MOU or they were to resign, and were prepared to take over by force if the MOU was not signed or their demands were not met. They wanted to have their own January 6 moment, but in Canada this time.
They just need to remove regulations. The reason there's a duopoly is that it's nearly impossible for a startup today to start a similar payment network.
Sounds like a great opportunity for a startup to fix!
In the country I live, there is a standard AML/KYC service that allows customers (banks, utilities) to easily perform ID verification in a few minutes.
No. We shouldn't make it easer for criminals to conduct terrorism, human trafficking, fraud etc just to make it slightly more economical for startups to compete with Visa/Mastercard.
When was the credit network used to finance terrorism? If we can't prevent terrorism then isn't it an advantage to have them move their funds on a network that can be completely traced and retroactively inspected? We'd prefer if terrorists use cash? Or we believe that if they can't use Amex it's impossible to use cash and therefore terrorism is defeated?
Also, when the startups compete with Visa/Mastercard, they provide that service to small businesses. So really, it's to make it massively more economical and easy for humans to start businesses that take credit.
Yes. It is a million times easier to catch criminals trying to physically launder large volumes of cash than it is to track money flowing through multiple companies (on/off-shore, crypto, different owners, different jurisdictions etc).
> It is a million times easier to catch criminals trying to physically launder large volumes of cash
Which is odd because all the arrests and cases I see published all catch the money laundering activity because it reached the banking system, not because an alert officer spotted large volumes of physical cash.
> Why do you think AML/KYC is such a priority ?
I honestly don't know. I can't see any evidence which suggested it needed to be made a priority generally. It looks like most of this fraud involves real estate.
To rephrase: we should make it harder for everyone to do stuff because of the tiny minority criminals we want law enforcement to catch (and whose job we need to make easier by way of crime-preempting hacks in every system criminals might use because otherwise it would be too difficult for law enforcement to do their job).
Break? It's practically enshrined in the law, seeing as any given bank can only have one credit card affiliated with it. So if I'm e.g. a normal National Bank client, I get to have a Visa card or no card at all.
I suppose online banks could change things a bit, but without that, introducing a new credit card provider is practically impossible.
> any given bank can only have one credit card affiliated with it.
Is that true? Is that an actual law, or some anticompetitive terms&conditions from Visa and Mastercard? If anything feels like the law should ban this kind of anti competitive behavior.
It doesn't appear to be true if you check websites of Canadian banks (e.g. CIBC, RBC, BMO, Scotia…) they all offer Visa and Mastercard, and Scotia even also offers Amex as well.
Not mentioned in this article, but certainly related, was the Canadian governments unprecedented step to freeze hundreds of bank accounts of protestors during COVID protests using their Emergencies Act. While I couldn't be more politically removed from the protestors, using a legislative power envisioned for war like conditions to personally ruin protestors financially is more than worrying.
https://en.wikipedia.org/wiki/Emergencies_Act