Canadian lawmakers target Interac, hint big-bank owners should be forced to sell
Canadian lawmakers took aim at the country’s widely used money-transfer service, run by Interac Corp., and hinted that its owners should be forced to sell it.
Interac’s chief executive Jeremy Wilmot was grilled by Parliament’s Industry and Technology Committee in Ottawa Monday, two weeks after Canada’s competition commissioner confirmed he had launched a preliminary investigation into the company’s conduct over electronic transfers.
Its e-Transfer service moves money electronically between accounts, is distinct to Canada and is used in about 100 million transactions per month.
Conservative lawmaker Michelle Rempel Garner cited an Interac fee schedule at an Oct. 28 committee hearing alleging that large banks — which are part owners of Interac — are charged six Canadian cents (four cents) per e-Transfer, and smaller institutions are charged as much as 43 Canadian cents. She then suggested the competition commissioner examine whether the volume-pricing model was adversely affecting smaller players.
Wilmot said on Monday that, after more than a year of development work, Interac was moving to a flat-fee system as opposed to a volume-based pricing model, arguing the new system would make the service more accessible to new and smaller entrants. While he did not provide a fee schedule, he offered to follow up in writing.
Interac was founded in 1984 as a non-profit, co-operative venture between Royal Bank of Canada, Canadian Imperial Bank of Commerce, Bank of Nova Scotia, Toronto-Dominion Bank and Desjardins Group, adding more banks in the following years. Those institutions were investigated in 1996 for alleged abuse of dominance, which resulted in Interac expanding beyond its charter members. In 2013, Interac was allowed to
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