New Card Rules Proposed in Canada

Canadian Finance Minister Jim Flaherty has proposed a voluntary code of conduct for the credit and debit card industry in Canada amid ongoing discussions with merchant and consumer associations there. The proposed rules are meant to provide pricing flexibility and transparency for merchants who accept payment cards.

"This proposed Code is intended to promote fair business practices and ensure merchants and consumers clearly understand the costs and benefits of credit and debit cards," Flaherty said in a release. "By making clearer information available to consumers and encouraging fairer business practices, our Government is taking unprecedented steps to protect Canadian consumers."

Canada's Finance Department is encouraging stakeholders in the debate to e-mail comments on the proposed code to codeconsult@fin.gc.ca. The comment window lasts 60 days.

Under the code's "recommend policy elements," merchants would receive at least 90 days notice before fee changes. Another provision says merchants would not be obligated to accept credit and debit cards from the same network. Merchants can accept only a network's credit card, for example, without being required to also accept its debit card. Also, discounts will be allowed for any payment method, meaning merchants could incentivize cash payments. And issuers would only provide premium cards, which can cost more to accept, to consumers who ask for them, under the rules. Read the proposed code at http://www.fin.gc.ca/n08/data/09-109_1-eng.asp.

"I welcome input in the process to ensure the proposed Code ultimately meets its goals," Flaherty said. "The Government supports efforts that encourage a competitive environment which provides for fair pricing practices, innovation, a safe and secure payment system, and high quality services for consumers and merchants."

Read more on Canada's proposed rules in upcoming issues of AFP's monthly Payments newsletter. Subscribe to the newsletter at http://www.afponline.org/pub/store/pubs/payments.html or attend the Canada treasury management Forum: http://www.afponline.ca/pub/forums/tmf/tmf.html