2014-38 Regulating interchange fees

Interchange fees are the fees that merchants pay to credit card issuers whenever credit cards are used. The Canadian government sees the fees as too high and would like to have them reduced

Here is what the Globe is writing: "If fees are lowered, the banks and credit card companies could raise the interest rates they charge on these cards, jack up annual fees or make it harder for Canadians to earn loyalty points."

Looks like a no-brainer to me. Fees are incorporated into prices. This means customers who use cash bear the cost not only of profits earned by banks and by credit-card companies, but also of credit-card users' benefits. 

Who uses cash? Poor people. So the scheme is reverse Robin Hood. 

Note that the credit card market is not very competitive: two companies, Mastercard and Visa, have almost all the market. By the way, most of the interchange fee is earned by issuing banks; Mastercard and Visa get a small portion only. But they divide the market among themselves; I am not sure if there is a bank that issues both Visa and Mastercard, but that is unlikely.