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Visa & MastercardThis is a puzzling one for me.

The finance minister Jim Flaherty has announced changes to a new voluntary code of conduct for the credit card industry in Canada.  The message to the industry apparently is "play nice or we will legislate".

This seems like a good plan but a story in the Toronto Star really doesn't get me too excited.   

They say that merchants will have "more clout" negotiating fees and which network they choose.   I don't see that as anything new.

The big issue in Canada is that for many years, the merchant card industry was controlled by a few big players.  Each bank was lined up with either Visa or Mastercard and when the regulations changed, these banks spun off their merchant card divisions forming Moneris and Global Payments.   As Canadians are aware from their cell phone contracts, a couple of big players does not do much for competition.  In our dealings with these companies, they are the least "business friendly" merchant aquirers.  This is made even worse when you want to do online transactions.  Things are better than they were with the established companies, but they can always get better.

The good news is that more and more players are popping up.  We have partnered with Beanstream for several online merchants (they also have an arrangement with TD Canada Trust) and have also had good results with Chase Paymentech.  While Beanstream focuses on eCommerce transactions, Paymentech provides a full range of merchant services and I have been impressed with their competitive attitude.  No matter who you deal with for your store accounts, you will have to apply for web or MOTO accounts for your eCommerce transactions, so you owe it to yourself to shop around.

Merchants have always had the right to choose.  There are plenty of other providers who can clear funds to any bank.  Educate yourself and shop around.  A .5% difference in your rate on $100,000 of transactions will let you keep an additional $500 per month.

There are some other things in the code that might be useful.  All merchant providers have very confusing pricing tables and many merchants are surprised to discover additional fees.  It amazes me that some charge additional amounts to settle the transactions to your bank account for example.  Seems too me like that is a key part of the service...
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