Visa Canada says there is a big misperception that its new debit product is de­signed to rid Canada of its existing low-cost service run by Interac Association.

Critics contend Visa debit is putting non-profit Interac “under siege.” But the U.S.-based card giant argues Canadians will benefit from competition.

Mike Bradley, Visa Canada’s head of products, says the introduction of Visa debit in Canada will give consumers more utility. For instance, Visa debit offers international acceptance and a wider reach with online merchants.

It is also promising enhanced security through new chip-enabled cards, zero liability on fraudulent purchases, while dangling contact-less payments as a potential option.

Retailers and small business owners worry that once Visa and rival MasterCard, gain enough market share, Interac will cease to exist and fees will soar.

Sources say Finance Minister Jim Flaherty is hearing complaints that Visa and MasterCard are taking advantage of a little known “co-badging” rule to gain the upper hand on Interac.