Code of Conduct FAQs

What is the Code of Conduct and who does it apply to?

Released in 2010, the Code was developed to promote merchant choice, transparency and disclosure, and fairness in the credit and debit card market.

It helps to ensure that merchants and consumers understand the costs and benefits associated with credit and debit cards. The major payment card networks, acquirers and issuers are signatories to the existing Code. They will be invited to sign the newly released enhanced Code along with new entrants to the payments market in Canada.

The payment card networks enforce the Code’s provisions that apply to their member acquirers and issuers through their network rules and regulations. Compliance with the Code is monitored by the Financial Consumer Agency of Canada.

What are the key changes to the Code?

The revised Code contains several enhancements to address unfair business practices and improve transparency for merchants and consumers, including new provisions that apply specifically to mobile payments.

The key enhancements to the Code include:

  • Extending the application of the Code to mobile payments, including new consumer protections for mobile payment users;
  • Measures to facilitate the pass-through of credit card fee reductions to merchants;
  • A new complaints handling process available to merchants with Code-related complaints;
  • Enhanced disclosure requirements that will require plain language disclosure of key contract terms and conditions and merchant fees in information summary boxes on merchant contracts;
  • Providing greater flexibility for merchants to exit their contracts without penalty and limiting the automatic renewal of contracts;
  • New branding requirements for premium credit cards, to make these cards more easily identifiable to merchants at the point-of-sale; and
  • New disclosure requirements for credit card issuers, to inform consumers that apply for premium credit cards that use of these cards may result in higher merchant fees.

Why are these changes being implemented now?

The Code is being updated to reflect changes in the payment card market since 2010, such as the emergence of mobile payments technology and the growth of premium card issuance in Canada.

Many of the enhancements to the Code such as new rules on contract renewal, a dispute resolution process and enhanced information disclosure requirements, respond directly to concerns raised by small businesses and other retailers about the complexity of credit card acceptance fees and the persistence of unfair and deceptive business practices by some market participants. 

When will these changes take effect?

The payment card networks, issuers and acquirers will have 30 days from the date of the Code’s release to publicly re-commit to the Code. Most elements of the Code will come into force within nine months of the date on which the networks adopt the Code.

Some elements, such as the measures to facilitate the pass-through of interchange rate reductions to merchants and the new rights for merchants regarding acceptance of contactless payments, will take effect immediately.

There will be a slightly longer implementation period for the new enhanced disclosure requirements on account of the significant systems changes that acquirers will need to make.

Who was consulted in the development of these revisions?

The updates to the Code were developed in close consultation with a broad range of stakeholders, including the members of the Finance Canada Payments Consultative Committee, which includes members representing the credit and debit card networks, small business, retailers and consumers. Bilateral consultations were also conducted with acquirers and small merchant associations.

How will transparency be improved for merchants and consumers?

All acquirers will be required to complete information summary and fee disclosure boxes that will be included with merchant-acquirer contracts. The information summary box will describe the key contract terms and conditions in a clear, simple and not misleading manner. The fee disclosure box will require acquirers to disclose all of the different rates charged for each type of payment card. This aims to reduce the complexity associated with acquirers charging differentiated rates depending on the type of card and how a card transaction is processed.

Consumers will benefit from a new requirement that requires credit card issuers to disclose to consumers who apply for premium credit cards that use of these cards results in higher merchant fees. This will help to empower consumers in selecting their payment method by disclosing the actual cost to merchants of accepting payments with a premium card.