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Canada introduces mobile payments code of conduct

The code promotes merchant choice, fee transparency and disclosure, and fairness in the credit and debit card market.

Editor's note: Read an extended story about this issue on Mobile Payments Today. 

Joe Oliver, Canada's Finance Minister, Monday announced that the Code of Conduct for the Canadian Credit and Debit Card Industry has been extended to mobile payments.

Introduced in 2010, the code promotes merchant choice, fee transparency and disclosure, and fairness in the credit and debit card market, according to the Department of Finance. It stipulates that merchants who accept credit card payments from a card network aren't required to accept debit card payments from the same network, and vice versa. 

Merchants are also allowed to provide discounts for different methods of payment - for example, cash, debit card and credit card - as well as different levels of discounts among different card networks.

The major Canadian card networks, acquirers and issuers are signatories to the existing code. They will be invited to sign the enhanced code along with new entrants to the Canadian payments market, the Department of Finance said.

All the code's terms, including a new requirement that acquirers pass on Visa and MasterCard’s November 2014 credit card fee reductions to merchants, now apply to mobile payments. For example, merchants who accept credit card credentials from a particular network via consumers' mobile wallets or mobile devices cannot be forced to accept debit card mobile credentials from that network and vice-versa.

Consumers will have full control over their mobile wallets' default settings so they are free to choose which debit or credit card payment apps to use, according to the code. It stipulates that merchants have the right to stop accepting mobile payments if their acquirer increases its mobile payment fees relative to contactless card-based fees, and just accept contactless card-based and contact-based payments without accepting NFC mobile payments. 

Dan Kelly, the Canadian Federation of Independent Business president, told the Canadian Press news agency that the enhanced Code will give merchants ammunition in the battle against new mobile fees.

"Our fear was there will be a big fee-apalooza when mobile payments go mainstream," Kelly told the Canadian Press. "The new rules make that less likely."