Interchange Fee Cut: A New Reality for your Credit Card Rewards? + MORE Jan 13th

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TORONTO – More Canadians will be reaching for their cellphones instead of their wallets to pay for purchases this year, predicts a report by global professional services firm Deloitte.
The report, released Tuesday, sees 2015 as a “tipping point” for retailers, banks and telecom companies to adopt the technology, which allows consumers to make relatively small payments within seconds with their smartphones.
Duncan Stewart, a director at Deloitte Canada, said there now are more phone models with the technology, called near field communication, and more retail locations that can accept the payments.
The familiarity Canadians already have with using credit cards to tap and pay, whether in a coffee shop or at the drugstore, will make it easier for consumers to transition to using the same technology with their smartphone.
“They think: ‘If I’m doing it with my credit card, why not do it with my phone? It’s basically the same,” said Stewart.
Deloitte’s annual report named smartphone mobile payments as its top technology trend of 2015 — beating out other emerging trends such as 3D printers, click-and-collect retail locations and the Internet of Things — a term used to describe devices that communicate with each other…

OTTAWA – One of Canada’s biggest banks says sliding oil prices could turn the federal government’s promised 2015-16 surplus into a deficit.
A report by TD Bank is projecting Ottawa to run a $2.3-billion shortfall next fiscal year rather than the $1.6-billion surplus predicted by the government in November — before oil prices fell further.
The bank also says the government’s $4.3-billion surplus projection for 2016-17 is on track to become a $600-million deficit unless new revenue-generating or cost-cutting measures are introduced.
TD, however, says the deficit estimates are still smaller than the government’s $3-billion reserve set aside for contingencies — which would help keep Ottawa in surplus territory.
Prime Minister Stephen Harper has promised his government will balance the books in 2015-16 despite tumbling oil prices.
The Bank of Canada is scheduled to address the economic impact of falling oil prices in a speech by deputy governor Timothy Lane…

Are your credit card rewards in for a cutback?
Last November, it was announced that Canada would be the latest nation to cap credit card interchange fees. The fees, which are behind-the-scene charges paid by merchants to credit card issuers every time a card is used in a transaction, will be capped at an average of 1.5 per cent for five years, to go into effect this coming April.
The reduction is meant to benefit both retailers, who will pay less for the ability to offer credit card payment, and consumers who will theoretically enjoy lower prices passed down from retailers’ savings.
However, the precedent set in other countries with fee caps paints a different picture: interchange fee reduction efforts have been criticized in both Australia and Spain for resulting in reduced credit card benefits and higher fees. And, as the deadline approaches to implement the changes in Canada, questions arise as to whether cardholders here will see their rewards credit card offerings shrink in size and quality…