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Senator Calls for Investigation of Credit and Debit Card Systems

Today, for the second time, Senator Pierrette Ringuette tabled a motion in the Senate so that the Standing Senate Committee on Banking, Trade and Commerce be authorized to examine and report on the credit and debit card systems in Canada and their relative rates and fees, in particular for businesses and consumers. The proposed investigation would endeavor to expose the impact of rates and fees on businesses and consumers – focusing on rising interchange rates and interest rates.  Interchange rates are the percentage of the total purchase price that businesses pay in order to provide credit card services to their customers – and they have risen in 2008.

The Basic Facts:


  • Canadians hold 68.2 million credit cards with the Visa and MasterCard brands and used them to purchase $267 billion of goods and services in 2008;
  • 80% of all credit cards in Canada are Visa or MasterCard;
  • Consumers pay up to 24.75% in interest rate to credit cards;
  • Current legal interest rate in Canada can be up to 60%; 
  • Credit card transaction fees or, to use the financial sector language, the interchange rate, are up to 3% of purchases for businesses, up to 1.8% for Governments and 1.5% for Charities.  The interchange rates are set by the credit card companies and paid to them.
  • Australia’s legal interchange rates are 0.45% for businesses, 0.33% for government agencies and 0% for charities; 
  • Interac has entered into talks with the Competition Bureau regarding the abandonment of Interac’s “not-for-profit mandate”;
  • Currently, the average cost to businesses for debit card transactions is $0.12 per transaction in addition to consumer fees.  

“Since December, I’ve received feedback and encouragement from Canadians, increasing my determination to get the Senate to move forward.  Make no mistake; Canadians are furious at sky-high interest rates charged by banks and credit cards companies” said Senator Ringuette.  


In her speech, she highlighted that facing a difficult financial situation, some Canadians will depend more on credit and that given the current state of our economy, consumers need to pay less interest rates to sustain their purchasing power.  That is why she strongly believes that the Senate should investigate and report on the credit and debit card systems in Canada.  She argues that the government must establish regulations and oversight to ensure transparency into credit and debit card rates. 


This is the Senator’s second attempt since Parliament was prorogued last month.  She argues that the Senate and Canadians have lost two precious months of debate and work on this and other important matters.