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MasterCard Canada Looks Forward to
Presenting the Facts on the Payments Industry

Toronto – March 24, 2009 – MasterCard Canada has accepted an opportunity to appear before the Senate Standing Committee on Banking, Trade and Commerce in order to discuss the payments industry, as well as to address the significant misinformation being propagated by retail sector lobbyists.

“The many benefits Canadian merchants receive from card acceptance continue to be downplayed,” said Kevin Stanton, President, MasterCard Canada. “I look forward to the opportunity to discuss the important role card payments play in helping maintain a well-functioning financial system in Canada.”

The Canadian credit card payment system works well and is an important source of credit for Canadian consumers, and provides secure, reliable, guaranteed payment processing for merchants. There is vigorous competition, continual product improvements, and global usage. Canada has fostered a healthy financial industry that is responsive to marketplace and consumer needs and continually improves its offers and services while managing exposure to risk.

In the meantime, MasterCard reiterates the following key points regarding interchange and debit:

Interchange:

(for more information: www.interchangetruth.com)

Canada has a well-functioning payments system that provides significant convenience and security to consumers and merchants. It has continued to operate effectively and drive commerce despite a global credit crisis. More than $240 billion in Canadian commerce is flawlessly expedited on credit card systems annually.

When interchange was regulated in Australia, it led to reduced card benefits to consumers and there is no evidence that retailers passed on savings in reduced prices – such a cash grab should not be repeated in Canada. As the Australian Financial Review noted: “…While some substantial costs have been removed from the system, consumers are now subject to opportunistic fees levied by merchants, whether it be ad hoc overcharging at the point of sale or the unavoidable imposts charged by the airlines for online payment where no alternative is available…”

A merchant that processes a credit card transaction enjoys guaranteed payment even at a time of increasing consumer default rates.

Merchants benefit from increased sales, improved payment efficiency, reduced cash handling, customer convenience and satisfaction, ecommerce facilitation, international purchase handling, automatic currency conversion and settlement, among other benefits.

Interchange is a fee that passes between acquirers (who handle card processing for merchants) and card issuers. Issuers receive interchange to compensate them for significant costs and risks borne in offering credit cards including interest-free periods, account management, credit losses, fraud protection and processing.

MasterCard receives no revenue from interchange.

Consumers do not pay interchange fees nor merchant fees.

Merchants who choose to accept credit cards pay to participate in exchange for the benefits received. The fee accounts for the multiple benefits received.

Merchants pay a merchant fee established by their acquirer, not MasterCard. Interchange forms a portion, but not all, of that merchant fee.

MasterCard’s 2008 adjustment to interchange rates was the first in seven years. Some rates were reduced.

A merchant can obtain his MasterCard interchange rates via www.mastercard.ca. This information has been available for more than two years.

Debit

MasterCard Worldwide has PIN-based debit payment solution -- Maestro® -- used by more than 652 million cardholders in over 100 countries.

MasterCard Canada is preparing to expand its global debit processing system in Canada where it would deliver compelling benefits to Canadian consumers and merchants.

Using Maestro, Canadian consumers could use debit all over the world.

Accepting Maestro means Canadian merchants could accept international travelers’ debit cards.

MasterCard will provide technological advancements including greater security and fraud protections, innovations like PayPass™ contactless payment, e-commerce payment capacity, and mobile payments.

MasterCard operates a global debit infrastructure with centralized operations that run 24/7. The system delivers significantly greater scale than Canada’s incumbent debit network. It has had zero downtime in more than seven years.

MasterCard will create competition in the Canadian debit market where it has never existed.

About MasterCard Worldwide
MasterCard Worldwide advances global commerce by providing a critical economic link among financial institutions, businesses, cardholders and merchants worldwide. As a franchisor, processor and advisor, MasterCard develops and markets payment solutions, processes approximately 21 billion transactions each year, and provides industry-leading analysis and consulting services to financial institution customers and merchants. Through its family of brands, including MasterCard®, Maestro® and Cirrus®, MasterCard serves consumers and businesses in more than 210 countries and territories. For more information go to www.mastercard.com.

For more information, please contact:
Julie Wilson
MasterCard Canada
416-365-5594 / Julie_Wilson@mastercard.com





			MasterCard Canada Looks Forward to Presenting the Facts on the Payments Industry Toronto – March 24, 2009 – MasterCard Canada has accepted an opportunity to appear before the Senate Standing Committee on Banking, Trade and Commerce in order to discuss the payments industry, as well as to address the significant misinformation being propagated by retail sector lobbyists. “The many benefits Canadian merchants receive from card acceptance continue to be downplayed,” said Kevin Stanton, President, MasterCard Canada. “I look forward to the opportunity to discuss the important role card payments play in helping maintain a well-functioning financial system in Canada.” The Canadian credit card payment system works well and is an important source of credit for Canadian consumers, and provides secure, reliable, guaranteed payment processing for merchants. There is vigorous competition, continual product improvements, and global usage. Canada has fostered a healthy financial industry that is responsive to marketplace and consumer needs and continually improves its offers and services while managing exposure to risk. In the meantime, MasterCard reiterates the following key points regarding interchange and debit: Interchange: (for more information: www.interchangetruth.com) Canada has a well-functioning payments system that provides significant convenience and security to consumers and merchants. It has continued to operate effectively and drive commerce despite a global credit crisis. More than $240 billion in Canadian commerce is flawlessly expedited on credit card systems annually. When interchange was regulated in Australia, it led to reduced card benefits to consumers and there is no evidence that retailers passed on savings in reduced prices – such a cash grab should not be repeated in Canada. As the Australian Financial Review noted: “…While some substantial costs have been removed from the system, consumers are now subject to opportunistic fees levied by merchants, whether it be ad hoc overcharging at the point of sale or the unavoidable imposts charged by the airlines for online payment where no alternative is available…” A merchant that processes a credit card transaction enjoys guaranteed payment even at a time of increasing consumer default rates. Merchants benefit from increased sales, improved payment efficiency, reduced cash handling, customer convenience and satisfaction, ecommerce facilitation, international purchase handling, automatic currency conversion and settlement, among other benefits. Interchange is a fee that passes between acquirers (who handle card processing for merchants) and card issuers. Issuers receive interchange to compensate them for significant costs and risks borne in offering credit cards including interest-free periods, account management, credit losses, fraud protection and processing. MasterCard receives no revenue from interchange. Consumers do not pay interchange fees nor merchant fees. Merchants who choose to accept credit cards pay to participate in exchange for the benefits received. The fee accounts for the multiple benefits received. Merchants pay a merchant fee established by their acquirer, not MasterCard. Interchange forms a portion, but not all, of that merchant fee. MasterCard’s 2008 adjustment to interchange rates was the first in seven years. Some rates were reduced. A merchant can obtain his MasterCard interchange rates via www.mastercard.ca. This information has been available for more than two years. Debit MasterCard Worldwide has PIN-based debit payment solution -- Maestro® -- used by more than 652 million cardholders in over 100 countries. MasterCard Canada is preparing to expand its global debit processing system in Canada where it would deliver compelling benefits to Canadian consumers and merchants. Using Maestro, Canadian consumers could use debit all over the world. Accepting Maestro means Canadian merchants could accept international travelers’ debit cards. MasterCard will provide technological advancements including greater security and fraud protections, innovations like PayPass™ contactless payment, e-commerce payment capacity, and mobile payments. MasterCard operates a global debit infrastructure with centralized operations that run 24/7. The system delivers significantly greater scale than Canada’s incumbent debit network. It has had zero downtime in more than seven years. MasterCard will create competition in the Canadian debit market where it has never existed. About MasterCard Worldwide MasterCard Worldwide advances global commerce by providing a critical economic link among financial institutions, businesses, cardholders and merchants worldwide. As a franchisor, processor and advisor, MasterCard develops and markets payment solutions, processes approximately 21 billion transactions each year, and provides industry-leading analysis and consulting services to financial institution customers and merchants. Through its family of brands, including MasterCard®, Maestro® and Cirrus®, MasterCard serves consumers and businesses in more than 210 countries and territories. For more information go to www.mastercard.com. For more information, please contact: Julie Wilson MasterCard Canada 416-365-5594 / Julie_Wilson@mastercard.com
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		© MasterCard Canada 2009