Some begin to exit Canada’s credit card business, while others look toward new systems, such as mobile phone payments.
TORONTO – A new report by Deloitte suggests that Canada’s credit card industry has experienced a significant drop in profitability, in part due to the government’s new code of conduct, the Toronto Star reports.
As a result, some companies are planning to exit Canada’s credit card business while others are looking toward new systems, such as mobile phone payment.
Canada’s credit card industry has been hit by rising consumer bankruptcies and increased regulation, a perfect storm, according to Deloitte Canada. “The industry is at a turning point,” said Pat Daley, leader of Deloitte Canada’s payment practice.
The report comes just a week after Canada’s Minister of Finance James Flaherty launched a voluntary code of conduct, which gives merchants and businesses more bargaining power over the fees they pay to accept credit cards. It has also made it more difficult for Visa and MasterCard to enter Canada’s debit market.
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