We support US financial giants with every purchase you make using your credit card.
Most credit cards in Canada are issued by domestic banks, credit unions and other financial companies, but are also linked to San Francisco-based Visa International. MasterCard is based in New York State Purchase. Or American Express based in New York.
Canadian alternatives are available – Interac David and e-transfer.
“INTERAC is 100% Canadian,” said Debbie Gamble, group head of strategy and marketing at InterAC. “It was created by Canadians. It is run by Canadians. We focus solely on Canadians and celebrated our 40th anniversary last November.”
Interac and cash are patriotic choices for payments in the trade war with the United States. They also really match the current economic situation, both consumers and business. Cash and debit provide more control over your money and also costs less for retailers than when accepting payments with credit cards.
Credit cards are the consumer’s biggest choice when paying things. The latest figures for 2023 were 33% of trading volume, with debit accounting for 30% and cash at 11%. Credit card volumes increased 9% compared to the previous year, with debits down 6% and cash down 20%.
Credit cards have built the following by providing travel rewards and cashback, as well as smaller inductions such as car rental insurance coverage. As long as you can pay on time, a credit card is a good way to narrow down your bonus value from your spending. Anyway, in normal times.
Today, Canadians look at every aspect of their lives to see if there is a way to support the domestic economy and resist US hostility in the form of tariffs on annexation and presidential meditation.
Debit payments cannot compete with credit cards to generate rewards at tangible value. In a tough economy, cashback credit card rewards can be extremely helpful in offsetting purchase costs like food for a week.
What David offers is a way to keep your money in Canada. InterAC is owned by nearly 300 Canadian banks and credit unions, Gamble said. While major banks have proportionately more shares, the structure of the INTERAC board limits the organization’s management.
The Canadian nature of INTERAC extends to its systems and data processing. Gamble said Interac’s payment network must meet the data sovereignty requirements. This means that all processing takes place in Canada.
Credit cards include Canadian veneers in the form of issuing banks, credit unions, etc. However, these cards make money for Visa, MasterCard, Amex, and domestic financial institutions.
When you pay for a purchase with a credit card, the seller pays a non-small but not important percentage through what is known as an interchange fee. These fees are shared by issuers such as credit card networks such as Visa and banks, says Lynda Lovett of consulting firm MarketSense Inc.
“The issuer also benefits from credit card balances, cash advances and late fees interest rates,” Lovett said in an email.
Debit differs in that retailers pay a flat rate that is only a small portion of their credit card interchange fee. The Canadian Retail Council says that debit transactions generally cost less than 10 cents to process, but the fee can reach 40 cents.
The federal government announced last fall that credit card costs for small businesses would fall by up to 27%. Still, the exchange rate for in-store transactions is an annual weighted average rate of 0.95% of purchases. A $100 purchase costs 95 cents.
Gamble argued that David was suitable for these times in two ways. The first thing is that you have more control over your money. Debit payments are more or less real-time from your bank account, but credit card purchases are billed monthly.
Due to low interchange fees, David also provides a way to support local businesses when the trade war gets heavy on the economy. Credit cards help you make us big finance richer.
Are you a young Canadian with money in your heart? Listen to our award-winning stress test podcasts to set yourself up for success and avoid costly mistakes.
