Government regulation would hurt consumers by limiting competition, Canadian chief warns
Mar 31, 2009 Dana Flavelle - Business reporter

The head of Visa Canada chose a Toronto business audience to test the sales pitch he plans to deliver to Ottawa: Don't regulate the debit and credit card industry.

But the message fell, at least partly, on deaf ears.

While acknowledging that growing complaints about the industry have led to a Competition Bureau investigation and Senate hearings calling for caps on fees and rates, Tim Wilson said more government involvement would stifle innovation and choice.

As an example, he cited Visa's plans to enter Canada's debit market in competition with the bank-owned Interac system.

Although Visa debit cards would cost more to process than Interac cards, Wilson said they would also offer increased security, lower payment risk and more opportunities to shop online and outside Canada.

"There are no regulations that prohibit us from entering the market right now," Wilson said in an interview after his speech to the Economic Club of Toronto. "The concern is there will be regulations in future that will prohibit us from entering the market or limit the way in which we enter the market. And we're suggesting that would limit competition and therefore innovation and the value we can deliver to consumers."

The system could be in place as early as this fall if Canada's banks and other card issuers agree to it, he said.

He described the higher cost to business of handling Visa debit cards as "moderate."

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