Thank you, Mr. Chair.
I believe in competition. In my view, the role of government is to regulate the marketplace in such a way as to ensure sufficient competition so that the invisible hand can then set the appropriate price.
What would you, the bank issuers, say to the following two-part proposal? First, the government does not cap interchange rates. Rather, it allows the bank issuers--you--to set your own interchange rates by forbidding Visa and MasterCard from setting those rates. In other words, you could set those rates at 1.2%, 1.5%, 2%, 10%, or whatever you wish.
Secondly, the government mandates that the interchange rate be added on to the final bill of sale at the point of sale so that the consumer can make a choice between cash or credit. For example, if the consumer chooses credit, then that interchange rate is added on at that point to the bill of sale, at the point of sale, and itemized on the bill of sale so that the consumer can see what the rate is and what they've paid on the interchange, just as we do with the GST.
This seems to me to be a way to empower the consumer to choose the credit card and interchange rate that best fit their needs.