Evidence of meeting #138 for Industry, Science and Technology in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was visa.
A recording is available from Parliament.
Senior Vice-President, Market Development, Mastercard Canada
I'm not comfortable sharing that either.
Senior Vice-President, Market Development, Mastercard Canada
I try my best.
NDP
Senior Vice-President, Market Development, Mastercard Canada
It depends, really....
Charles Docherty Assistant General Counsel and Vice-President, Legal and Risk, Canadian Bankers Association
Yes, I try my best to pay it off.
Senior Vice-President, Financial Stability & Banking Policy, Canadian Bankers Association
The overwhelming majority of Canadians, 71%, pay it off in full every month.
NDP
Brian Masse NDP Windsor West, ON
I'll follow up on that. That's wrong in terms of the information I'm getting from Equifax and others right now. Are you contesting, then, that your numbers are different from Equifax and others that are showing that Canadians aren't paying off more than ever before?
Senior Vice-President, Financial Stability & Banking Policy, Canadian Bankers Association
I'm telling you that it's the information that we have, based on our surveys.
NDP
Brian Masse NDP Windsor West, ON
That's based on your surveys. These are just Bank of Canada surveys. It's not Equifax. It's not the others that are out there. It's just your surveys.
Senior Vice-President, Financial Stability & Banking Policy, Canadian Bankers Association
I believe it comes from the Bank of Canada, but I'll check.
NDP
Brian Masse NDP Windsor West, ON
That's fair enough. It's fine. The information I'm getting is that Canadians are significantly up.
I guess one of the reasons I'm asking this is that I'd like to know specifically if you have noticed any difference in behaviour with regard to the credit cards you're using—and maybe I'll go across the back to get everybody involved here—since the pandemic? Is business up or down since the pandemic, with regard to usage, behaviours and the model of people who are going to default, not going to default or going to pay it off? What has changed over the last number of years, if anything?
Senior Vice-President, Financial Stability & Banking Policy, Canadian Bankers Association
I'll say a couple of things.
First off, arrears rates, as I mentioned, continue to be quite low at 1.6%, which is great.
During the pandemic, not surprisingly, there was a big shift to e-commerce—people buying online—obviously because they couldn't shop in store. I think a lot of that has reverted back to the conventional prepandemic retail environment. I think my colleagues at the networks could probably give you a sense of what that looks like.
NDP
Brian Masse NDP Windsor West, ON
Is that an opinion, or is that a fact?
The fact that I have is that credit card use and electronic transactions are still up. Money is rebounding somewhat, but it's significantly different from before.
Senior Vice-President, Financial Stability & Banking Policy, Canadian Bankers Association
That's correct; it's reverting back.
NDP
Brian Masse NDP Windsor West, ON
Mr. Dorey, is there any change in the business model?
I'll go across and back, so I can include everybody here.
Head of Corporate Affairs, Visa Canada & Vice-President, Global Government Engagement, Visa Canada Corporation
No.
Vice-President, Strategy, Pricing and Interchange, Mastercard Canada
We're not involved with lending money, so I can't comment.
NDP
Brian Masse NDP Windsor West, ON
Okay, but what about usage? You're saying that your business right now has not changed. It's exactly the same model that you have right now that you had before the pandemic. The pandemic didn't change you, and it's the same right now. Nothing has changed in your business at all.
Vice-President, Strategy, Pricing and Interchange, Mastercard Canada
Yes, there have been some changes. There is elevated use of electronic commerce as opposed to in-store.
Head of Corporate Affairs, Visa Canada & Vice-President, Global Government Engagement, Visa Canada Corporation
Similarly, I would say that our business grew significantly during the pandemic. We saw that both online, as the CBA mentioned, but also in store as people wanted to get away from cash. Also, we enabled a higher tap limit for contactless transactions to allow more transactions to happen at point of sale when people didn't need to interact with the point of sale.
We saw a significant growth during that period of time. I think the CBA is looking at some of the same statistics that we see in our business, which is that it has regressed to the mean in the years since then. Our business continues to grow in line with economic growth. That's certainly the case, but it's no longer accelerated. That acceleration that occurred during the pandemic has dissipated now.
NDP
Brian Masse NDP Windsor West, ON
I'm just going by stuff that's come in that is basically available to the public like Equifax and other types of surveys that are out there. What has shown that the business model doesn't need to change for the rest of the banks, the borrowing rate and so forth?
The use is up. What benefit did consumers get with the usage going up? Obviously, that requires an adjustment of business plan in terms of accessibility and all those things that Mr. Dorey mentioned. They changed some of their practices.
What did the customer get out of the benefit? I didn't see interest rates go down. I took on a public campaign to reduce credit card interest rates—you're probably familiar with that—at the start of the pandemic. What changed in terms of percentage with regard to borrowing rates and so forth for consumers?