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Industry committee You're correct. From what I heard at the end, we charge a flat fee to the acquirer of 0.8¢, and then together with the other services they provide to the merchant, they would bundle that into their contract with the merchant.
June 16th, 2009Committee meeting
Mark O'Connell
Industry committee In the Interac model, Interac charges the acquirer less than a cent to process that transaction from the merchants into the system. We also charge the issuer the same flat fee amount to process the transaction on the other side into the account to ensure that the money is availab
June 16th, 2009Committee meeting
Mark O'Connell
Industry committee We charge the acquirer 0.8¢ to process the transaction. Of course, the acquirer has a contract with that merchant and provides other services in processing and the terminal that sits on the point of sale at the merchant location. We're part of their operating costs. They would ha
June 16th, 2009Committee meeting
Mark O'Connell
Industry committee In answer to your first question, our fee to the acquirers is less than a cent; it's 0.8¢. That's charged to the acquirers. And no, the issuers don't receive royalties from the point of sale transaction.
June 16th, 2009Committee meeting
Mark O'Connell
Finance committee With respect to priority routing--does everyone understand priority routing? Priority routing starts with the financial institution that issues the debit card. If a financial institution chooses to offer two competing networks on the same debit card, the financial institution ca
June 16th, 2009Committee meeting
Mark O'Connell
Finance committee I just wanted to make sure that everyone understood it first. I do have significant concerns with priority routing. It is contrary to my stated strategies and beliefs of consumer choice and of merchant choice. So we are working through those things with the board, but I do have
June 16th, 2009Committee meeting
Mark O'Connell
Finance committee I think we're certainly going to have to look at our strategies. It would have some detrimental effects on those. We are putting our strategies and our pricing in the hands of merchants and consumer choice. If that choice is not available to them, then we would have to revert bac
June 16th, 2009Committee meeting
Mark O'Connell
Finance committee We believe in fair competition. We are working through this issue. It's a very complex issue when you're talking about multiple debit networks on the same card. It is an important competitive imperative for us going forward.
June 16th, 2009Committee meeting
Mark O'Connell
Finance committee While I can't comment specifically on the ongoing pricing deliberations within the restructuring project, I can say that our history is based on a simple transparent flat fee, switch fee, and we will respect that legacy. I think it's important to note, with respect to previous te
June 16th, 2009Committee meeting
Mark O'Connell
Industry committee I think we're certainly going to have to look at our strategies. It would have some detrimental effects on those. We are putting our strategies and our pricing in the hands of merchants and consumer choice. If that choice is not available to them, then we would have to revert bac
June 16th, 2009Committee meeting
Mark O'Connell
Industry committee While I can't comment specifically on the ongoing pricing deliberations within the restructuring project, I can say that our history is based on a simple transparent flat fee, switch fee, and we will respect that legacy. I think it's important to note, with respect to previous te
June 16th, 2009Committee meeting
Mark O'Connell
Industry committee With respect to priority routing--does everyone understand priority routing? Priority routing starts with the financial institution that issues the debit card. If a financial institution chooses to offer two competing networks on the same debit card, the financial institution ca
June 16th, 2009Committee meeting
Mark O'Connell
Industry committee I just wanted to make sure that everyone understood it first. I do have significant concerns with priority routing. It is contrary to my stated strategies and beliefs of consumer choice and of merchant choice. So we are working through those things with the board, but I do have
June 16th, 2009Committee meeting
Mark O'Connell
Industry committee We believe in fair competition. We are working through this issue. It's a very complex issue when you're talking about multiple debit networks on the same card. It is an important competitive imperative for us going forward.
June 16th, 2009Committee meeting
Mark O'Connell
Finance committee So you are correct in your first assertion that even under the association model, interchange is currently set at zero. Under the consent order, a majority vote of the board could change that rate, but I think that underscores that we're going through this restructuring, because
June 16th, 2009Committee meeting
Mark O'Connell