Royal Bank first to offer two credit cards
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Hey there, time traveller!
This article was published 06/08/2009 (6206 days ago), so information in it may no longer be current.
TORONTO — The Royal Bank of Canada announced plans Wednesday to become the first major credit card issuer in the country to offer both Visa and MasterCard.
Until recently, such credit card issuers as RBC were limited to offering only one major credit card to their customers. Most major banks in Canada, including RBC, have exclusive agreements with Visa, while BMO has a similar arrangement with MasterCard.
But after a favourable ruling last fall by the Competition Bureau of Canada, credit banks and customers are now able to strike partnerships with both.
RBC is the first major Canadian bank to take advantage of the ruling, announcing the launch of a new travel rewards MasterCard co-branded with WestJet Airlines Ltd. The card will debut alongside the Calgary carrier’s new loyalty program this fall.
The new card is likely to increase competition between Visa and MasterCard, but it also serves as an alternative to RBC’s existing Avion travel rewards Visa card, and CIBC’s Aerogold card, which works with Air Canada’s Aeroplan.
Sean Amato-Gauci, RBC’s vice-president of credit cards, said the launch of the new MasterCard is a direct result of the Competition Bureau’s decision.
“We know most Canadians carry both Visa and MasterCard already, and we wanted to provide that choice and flexibility to them,” he said in an interview. He added RBC is actively looking at other opportunities with both cards, and some of its rivals indicated Wednesday they were considering a similar move.
Kevin Stanton, president of MasterCard Canada, said the new RBC WestJet card will bring increased competition to businesses and consumers. Queen’s University marketing professor Kenneth Wong said consumers will have the benefit of more choice in credit cards. For example, they won’t have to switch banks to get one or the other card.
“The average Canadian does have seven cards in their wallet, three of them being credit cards, and now they can keep it all in-house,” he said.
The Competition Bureau agreed to support the idea of issuers being able to offer more than one credit card –so-called credit card duality — last fall after both Visa and MasterCard switched in recent years from being member-owned associations to publicly traded companies.
The bureau said it believed the corporate structure eliminated the risk of issuers exerting influence on the competitive decisions and governance of both credit card companies simultaneously.
Most countries, including the United States, allow for credit card duality. In fact, most Canadian banks have been offering both cards in other countries.
— Canwest News Service