2 Min Read
CALGARY, Alberta (Reuters) - Canada's competition regulator turned down a request by the Interac Association on Friday to convert the country's main debit card group into a for-profit corporation.
The Competition Bureau declined to alter a 1996 consent order that determined Interac's structure, governance and how it collects fees. The order was issued to ensure that Interac, which dominates Canadian point-of-sale transactions, didn't engage in anti-competitive practices.
"The consent order has promoted competition and, in particular, increased consumer choice," the regulator said in a release. "Based on currently available information, including Interac's current dominant position in the market, the bureau cannot support changing or removing the safeguards in the consent order."
However the bureau said it would allow Interac to alter its governance structure and would re-examine Interac's request if there were changes in the market or if the association had an alternative proposal that didn't weaken the safeguards in the consent order.
Interac, a non-profit association of banks, trusts, merchants and others, said it wanted to switch to a for-profit structure in order to better compete with debit cards offered by credit card companies. It said it was disappointed with the ruling but would work with the Competition Bureau.
"Arriving at an effective business model requires a number of changes to the consent order beyond a for-profit status, particularly in the areas of governance, funding and our organizational structure," Mark O'Connell, the association's chief executive, said in a statement. "We are pleased that the Competition Bureau will engage in discussions with us regarding these critical issues."
The Interac service lets customers make debit purchases and access their money at most automated banking machines and store cash registers.
Reporting by Scott Haggett; editing by Rob Wilson