The Honourable Jim Flaherty, P.C., M.P.
Minister of Finance
140 O’Connor Street
Ottawa, Ontario
K1A 0G5

Dear Minister:

It has recently come to my attention that the views of the Consumers’ Association of Canada with regard to specific elements of the proposed Code of Conduct for the Credit and Debit Card Industry in Canada may be being misrepresented by some stakeholders involved in these discussions. Therefore, please let me reiterate our position, as first outlined in our letter to you on September 14. That position has not changed and we will be posting this letter to our website to ensure further confusion or misrepresentation by others is put to a rest.

First, the CAC strongly supports recommendation #8 contained in the code. We do not believe that credit and debit functions should reside on the same payment card. We recently commissioned a paper, Demystifying Credit and Debit Cards in Canada, which looked at this issue. The paper recommended that should this policy ever change, consumers must retain the right to choose which type of payment is used at the point of sale; i.e. credit or debit. The merchant should have no say in that.

However, this leads to the second area I would like to clarify, since our views on the above are being misconstrued to suggest we have changed our position on debit routing. We still support recommendation #6 that allows merchant routing in the case of co-badged debit cards. It is still our position that the consumer experience would be significantly more cumbersome if they were forced to "choose" over which network their debit transaction would be processed.

Such a mandate would require a massive education effort by the banks and retailers and would significantly slow down the purchasing process for consumers, which is already being slowed by the move to chip technology. The CAC opposes further measures that would unnecessarily delay transaction times for consumers and feels a "consumer routing" would do just that.

Thank you again for the opportunity to discuss these issues.

Sincerely,

Bruce Cran
President
Consumers' Association of Canada