Canadian Retailer - Holiday 2015 - 13

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LEBLANC: Our focus today is on retailers and

the retail industry in Canada in the context of
payments, and the state of the Interac nation and
the payments infrastructure in general.

O'CONNELL: I've been going coast to coast
meeting with CFOs of retailers in addition to
recently hosting our annual merchant forum
to discuss payment costs and new payment
trends such as mobile payments, which is on
everyone's desk right now. Many want to know
about the mobile enhancements to the Code of
Conduct. I think the additions are very astute, Interac has gone festive with its holiday marketing campaign.
but they open up a potential flank if merchants
aren't vigilant in their debit acceptance choices. "Interac had always owned 'the convenient' space
My message is basically to make sure you use because we had the PIN instead of the PEN. Now
the power the Code has given wisely. Your choices
that's been equalized. So that was the impetus.
matter now, just like they did 25 years ago. We want
Interac Flash to be top of phone, just like we've We had to get more aggressive. We launched
been at the top of consumers' leather wallets. The Interac Flash and I believe that now it's time for the
Code is not a piece of legislation. The Code is not merchants to be more proactive in this battle."
what actually protects Interac Debit and this low- MARK O'CONNELL, president and CEO, Interac Association
cost environment. What does that is the symbiotic
nature between me and you [retailers]. In that relationship my responsibility is to make sure I get innovative products
to market, whether it's in-apps or in mobile wallets or on cards, and to
make sure we price them at the lowest cost possible for success. Your
[retailers] responsibility is to be diligent and think about the long
term effects of any alternative debit acceptance choices you make.
Let's call a spade a spade. Because the merchant community has
not embraced the credit card companies' debit solutions is why the
issuers have not, in any mass, issued domestic Visa Debit or MasterCard Debit cards. They don't want their call centres flooded with
customers saying 'Why doesn't this card work in nine out of every
10 stores?' So now with mobile, although it's cheaper to put multiple
debit applications into a phone wallet than it is to issue multiple
plastic cards, the same market force still applies: If merchants continue to choose to not accept alternate debit offerings, then these applications are of little use to an issuers' customers and will be buried
at the bottom of a phone, if they are deployed at all.
Remember that the original Code of Conduct allowed "co-badging"-you know how TD and CIBC and Scotiabank have the Interac logo on the front as well as the Visa Debit logo-because a
dumb piece of plastic can't differentiate. These cards are set up so
that Interac is the default for all domestic debit transactions, once
again because merchants have largely not accepted any alternative debit in this country at the point of sale in any meaningful
numbers. Visa Debit on those cards is used for international travel
only and some e-commerce. Now the enhanced Code covering
mobile has said that all payment brands must be completely separate on mobile devices. So when a customer is offered a mobile
debit card by their bank, it is extremely likely to be Interac due
to that huge merchant acceptance footprint out there. If that gap
ever closes, it could be a much higher cost card that is served up.

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HOLIDAY 2015 | CANADIAN RETAILER

| 13

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