On July 12, 2013, the Interac Association – responsible for operating Canada’s on-line, point-of-sale and ABM debit system - filed a request with the Competition Tribunal to amend the Consent Agreement under which it has been operating since 1996. The original agreement required, among other things, that Interac be managed on a not-for-profit basis. The Commissioner of Competition has consented to the proposal, after rejecting a similar request in 2010.

Interac seeks to restructure to become a for-profit corporation, with an independent board. It believes this change will provide the flexibility necessary in order to remain a low-cost payment alternative for merchants in what has become an increasingly competitive payments marketplace. The new Interac Corporation would operate its services under a cost-recovery model, which would it says will permit the allocation of funds for the research and development of new and innovative payment services.

Interac had previously sought in vain to restructure on a for-profit basis. In February 2010, the Commissioner of Competition decided not to consent to a similar request due to what it termed as Interac’s dominant position in the market. Then-Commissioner Aitken did not believe that restructuring was necessary for Interac to remain competitive; however, she indicated that she would be prepared to re-examine the request in future, provided there was new information or material change in the marketplace, or Interac advanced an alternative proposal.

Interac believes that the Canadian payments marketplace is undergoing significant shifts and faces increased competition in the form of large multinational competitors that are unencumbered by the operating constraints imposed by the 1996 Consent Agreement. According to the Competition Bureau press release, Interac’s new proposal includes specific assurances as to how it would retain safeguards ensuring open and non-discriminatory access to the Interac network, as well as the above-mentioned assurance that it would operate by means of a cost-recovery model and use profits to fund innovation.

As mentioned, the Commissioner of Competition has consented to the newly-proposed amendments, which must still be approved by the Tribunal. If approved, and subject to successful completion of the restructuring plan, the amended Consent Agreement will remain in force until June 2018.