Comments on: Interchange and how it is the next new problem for consumers in Canada http://blog.communitylend.com/2008/06/24/interchange-and-which-it-is-the-next-new-problem-for-consumer-in-canada/ Starting the conversation about P2P Lending in Canada Fri, 12 Feb 2010 06:08:07 +0000 http://wordpress.com/ hourly 1 By: Canadian Merchant Accounts - Stop Sticking It To Us http://blog.communitylend.com/2008/06/24/interchange-and-which-it-is-the-next-new-problem-for-consumer-in-canada/#comment-247 Canadian Merchant Accounts - Stop Sticking It To Us Tue, 28 Oct 2008 22:43:27 +0000 http://blog.communitylend.com/2008/06/24/interchange-and-which-it-is-the-next-new-problem-for-consumer-in-canada/#comment-247 [...] lack of transparency.  Just see what Alan a commenter on Colin’s Blog post titled, “Interchange and how it is the next new problem for consumers in Canada” has to [...] [...] lack of transparency.  Just see what Alan a commenter on Colin’s Blog post titled, “Interchange and how it is the next new problem for consumers in Canada” has to [...]

]]> By: Canadian government intervention on Interchange and the impact on rewards « The Bankwatch http://blog.communitylend.com/2008/06/24/interchange-and-which-it-is-the-next-new-problem-for-consumer-in-canada/#comment-148 Canadian government intervention on Interchange and the impact on rewards « The Bankwatch Thu, 31 Jul 2008 03:46:00 +0000 http://blog.communitylend.com/2008/06/24/interchange-and-which-it-is-the-next-new-problem-for-consumer-in-canada/#comment-148 [...] Interchange and how it is the next new problem for consumers in Canada « CommunityLend blog Banks take in an “interchange” fee, which is a percentage of the purchase, each time a customer uses the card. It covers many of the banks’ costs, including any loyalty or points programs they offer. [...] [...] Interchange and how it is the next new problem for consumers in Canada « CommunityLend blog Banks take in an “interchange” fee, which is a percentage of the purchase, each time a customer uses the card. It covers many of the banks’ costs, including any loyalty or points programs they offer. [...]

]]> By: Alan http://blog.communitylend.com/2008/06/24/interchange-and-which-it-is-the-next-new-problem-for-consumer-in-canada/#comment-134 Alan Thu, 26 Jun 2008 18:15:33 +0000 http://blog.communitylend.com/2008/06/24/interchange-and-which-it-is-the-next-new-problem-for-consumer-in-canada/#comment-134 Hi Colin, as my previous comments refer, disruption is desperately needed to free up a lot of capital that is rotting (literally - given the interest rates paid on deposits v. inflation) in personal deposits at commercial banks. Let us loose Colin, get us to the start line with CommunityLend. Cheers, Alan. Hi Colin, as my previous comments refer, disruption is desperately needed to free up a lot of capital that is rotting (literally – given the interest rates paid on deposits v. inflation) in personal deposits at commercial banks.

Let us loose Colin, get us to the start line with CommunityLend. Cheers, Alan.

]]> By: Colin http://blog.communitylend.com/2008/06/24/interchange-and-which-it-is-the-next-new-problem-for-consumer-in-canada/#comment-133 Colin Thu, 26 Jun 2008 00:17:09 +0000 http://blog.communitylend.com/2008/06/24/interchange-and-which-it-is-the-next-new-problem-for-consumer-in-canada/#comment-133 @Alan ... thats an awesome and highly disruptive point! I love it. @Alan … thats an awesome and highly disruptive point! I love it.

]]> By: Alan http://blog.communitylend.com/2008/06/24/interchange-and-which-it-is-the-next-new-problem-for-consumer-in-canada/#comment-132 Alan Wed, 25 Jun 2008 21:26:55 +0000 http://blog.communitylend.com/2008/06/24/interchange-and-which-it-is-the-next-new-problem-for-consumer-in-canada/#comment-132 Where there is no transparency you cannot get a clear preference signal from buyers. I would propose a very simple solution. Provide a chart at the cash-register indicating the fee/percentage according to the card used. Allow the customer to negotiate the difference with the seller if he uses a lower fee card or cash. (CC-Merchant contracts typically forbid offering a cash sale at a lower price, although I have paid cash several times in exchange for a lower price). If I use an ordinary credit card that has no rewards, why should I subsidize those who do? Where there is no transparency you cannot get a clear preference signal from buyers.

I would propose a very simple solution. Provide a chart at the cash-register indicating the fee/percentage according to the card used. Allow the customer to negotiate the difference with the seller if he uses a lower fee card or cash.

(CC-Merchant contracts typically forbid offering a cash sale at a lower price, although I have paid cash several times in exchange for a lower price).

If I use an ordinary credit card that has no rewards, why should I subsidize those who do?

]]> By: Colin http://blog.communitylend.com/2008/06/24/interchange-and-which-it-is-the-next-new-problem-for-consumer-in-canada/#comment-131 Colin Wed, 25 Jun 2008 18:33:10 +0000 http://blog.communitylend.com/2008/06/24/interchange-and-which-it-is-the-next-new-problem-for-consumer-in-canada/#comment-131 @Tom .. Thanks for stopping by. You may well be correct. In Australia when they eliminated interchange, competition actually reduced, so when the opposite occurs, i.e. increased interchange, it would be logical to assume greater opportunity for competition, @Tom .. Thanks for stopping by. You may well be correct. In Australia when they eliminated interchange, competition actually reduced, so when the opposite occurs, i.e. increased interchange, it would be logical to assume greater opportunity for competition,

]]> By: Tom Dolan http://blog.communitylend.com/2008/06/24/interchange-and-which-it-is-the-next-new-problem-for-consumer-in-canada/#comment-130 Tom Dolan Wed, 25 Jun 2008 14:48:05 +0000 http://blog.communitylend.com/2008/06/24/interchange-and-which-it-is-the-next-new-problem-for-consumer-in-canada/#comment-130 Interchange may be a bad thing for consumers, but merchants may be able to take advantage of increased competition. The higher margin yields associated with Interchange adjustments lead more private (non-bank) financial institutions to compete for merchant service business. In tern, new players enter the market regularly creating a much more competitive landscape for merchants. Today, merchants shopping for new processing relationships might typically entertain bids from 10 different POS (Point of Sale) companies whereas 5 years ago they would likely just walk into their bank and acccept whatever pricing was given to them. Interchange may be a bad thing for consumers, but merchants may be able to take advantage of increased competition. The higher margin yields associated with Interchange adjustments lead more private (non-bank) financial institutions to compete for merchant service business. In tern, new players enter the market regularly creating a much more competitive landscape for merchants. Today, merchants shopping for new processing relationships might typically entertain bids from 10 different POS (Point of Sale) companies whereas 5 years ago they would likely just walk into their bank and acccept whatever pricing was given to them.

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