An overview of the Canadian debit model and comparison with the US system, prepared by Dove Consulting from a commission by US payments network Pulse EFT Association.
The study was prompted by references made at conferences and by industry commentators citing the benefits of the Canadian debit model compared to United States offerings.
It concludes that the free market-driven US debit payments system, in which both consumers and merchants have choices in debit processing options, saved cardholders more than $4.3 billion in fees last year when compared to the system utilised in Canada. Unlike in the US, every major bank in Canada charges its customers a per-transaction fee every time they use their debit card. Moreover, there is only one form of debit in Canada - PIN-based - and it is supported by only one electronic funds transfer network, Interac.
After contrasting the two systems, the Dove white paper concludes that the Canadian model is unlikely to be embraced in the US anytime soon.
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