Canada: Updated Code Of Conduct For The Credit And Debit Card Industry In Canada

On April 13, 2015, the Department of Finance announced changes to the Code of Conduct for the Credit and Debit Card Industry in Canada (the "Code"). The Code has been in existence since 2010 and consisted previously of 10 Elements applicable to participants in the debit and credit card industry. The updated Code includes 3 additional Elements which allow merchants to reject contactless payments, require new disclosure requirements for merchant-acquirer agreements and require a dispute resolution process for complaints from merchants. In addition, the updated Code will allow a merchant to cancel their agreement with an acquirer if the reductions in interchange rates announced last November are not passed on in full to merchants, will extend the application of the Code to various aspects of mobile payments and prescribe new branding and disclosure requirements for premium cards, all as discussed in more detail below.

The release of the updated Code was announced concurrently with the release of a consultation paper on the oversight of Canada's national payment systems, Balancing Oversight and Innovation in the Ways we Pay: A Consultation Paper. This Consultation Paper may in the end have far more far-reaching impact than the changes to the Code itself, as it raises the possibility of regulatory oversight of national retail payment systems, both bank and non-bank.

Participants in credit and debit card networks (which would include debit and credit card issuers and merchant acquirers) have 30 days from April 13 to review and adopt the Code. Once adopted, the changes to the Code will come into effect in stages, as follows:

Changes with immediate effect upon adoption of the Code

  • Pass-through of interchange rate reductions (changes to Elements 2 and 3): Payment card networks will be required to provide 90 days' notice of any reduction in applicable interchange rates, and merchants will have 90 days to cancel their merchant-acquirer contract (and the related service contracts) without penalty if the full savings of a rate reduction are not passed on to the merchant. This may prove to be very contentious given that Visa Canada and MasterCard undertook in November 2014 to reduce interchange rates to an "average effective rate" of 1.50%. How this will be applied to individual merchant-acquirer contracts remains to be seen.
  • Extension to mobile payments of merchant right to accept only debit or credit card payments from a particular network (changes to Element 4): The extension of Element 4 (which provides that merchants who accept credit card payments from a network are not required to accept debit card payments from such network and vice versa) to mobile payments takes effect upon adoption of the Code. As a result, merchants who accept debit card credentials in a mobile payment context cannot be obligated to accept credit card credentials from the same network, and vice versa.
  • Right not to accept contactless payments (new Element 11): Merchants will have the right to cancel contactless payment acceptance with 30 days' notice while keeping other parts of the contract, without penalty. This right of cancellation will also be available in respect of a merchant's acceptance of mobile contactless payments if fees in respect of mobile contactless payments increase relative to fees applicable to card-based contactless payments.
  • Right to provide notice of non-renewal of merchant-acquirer agreement and related agreements (new Element 12): Merchants will be permitted to not renew a merchant-acquirer agreement and any related service agreement with a service provider, by providing notice of non-renewal at any time up to 90 days prior to the expiration date of the agreement.

Changes to be implemented within 60 days of adoption of the Code

  • Dispute resolution process (new Element 13): A clear dispute resolution process that adheres to detailed standards prescribed in the Code must be made available to merchants to address complaints related to the Code. Element 13 will also require acquirers to report semi-annually to the payment card networks on complaints that they receive and payment card networks will in turn be required to share this information with the Financial Consumer Agency of Canada.

Changes to be implemented within 9 months of adoption of the Code

  • Extension of Code to mobile payments (Elements 6, 7, 8): Competing debit card credentials will need to be represented as separate applets with consumers having full discretion to choose which debit card applet to use at point-of-sale (Element 6), payment card networks will need to ensure equal branding of brands available on mobile devices or in mobile wallets (Element 7) and consumers must be provided with complete control over default settings on their mobile devices and mobile wallets to select debit or credit payment applets (Element 8).
  • Premium card disclosure requirements (Element 9): Premium cards that are subject to different acceptance costs than regular cards will need to have clear and prominent branding identifying them as premium products. Payment applets that link to premium card credentials must be similarly branded. Applications for such cards will have to prominently disclose the fact that those higher acceptance costs may be charged to the merchant.
  • Renewal period for fixed term merchant-acquirer agreement and related agreements (new Element 12): Fixed term merchant-acquirer agreements and related service contracts will not renew automatically for the same period as the initial term, but instead may be converted to automatically renewable agreements for terms of no longer than 6 months.

Changes to be implemented within 18 months of adoption of the Code

  • Specified disclosure requirements for merchant-acquirer agreements (changes to Element 1):Within 18 months of adoption of the Code, acquirers will need to ensure that all new and renewed merchant-acquirer agreements include the additional prescribed disclosure, and that all such agreements contain an information summary box and a fee disclosure box based on the templates attached to the Code. Payment card networks will also be required to make default domestic network assessment fees (not just interchange rates) available on their website and to post any changes to these rates on their website.

Payment card networks will be required to review, at least every 3 years, the market practices of merchant-focused agents, based on the Code, and to report on the results of this review to the Financial Consumer Agency of Canada.

The release of the Code comes as the payments industry is undergoing a period of significant innovation and change, as well as legislative change. The new Code is one of a number of recent or contemplated legal and regulatory reforms affecting the payments industry, including recent reforms to the Canadian Payments Association.

To view original article, please click here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.