A Brief Introduction To The Code Of Conduct For The Credit And Debit Card Industry In Canada

The purpose of the Code of Conduct for the credit and debit card industry is to demonstrate the industry’s commitment to:

Ensuring that the merchants are aware of the costs that are associated with the acceptance of credit and debit card payments, thereby allowing merchants to forecast their monthly costs related to accepting these kind of payments in a reasonable manner.

Providing merchants with increased flexibility of pricing in order to encourage consumers to choose the lowest-cost payment option available.

Allowing merchants have a say in which payment options they will accept.


It is important that all disclosures to merchants provided under the Code must be presented in a manner which is clear, simple, and non-misleading.


The Code is applied to credit and debit card networks (they will be referred to as payment card networks) and their participants (which includes card issuers and acquirers).

The payment card networks that choose to adopt the Code are expected to abide by the policies outlined below and have to ensure compliance by their respective participants. This includes issuers, acquirers, and their downstream participants. The Code will have to be incorporated in its entirety in the network of the payment card contracts, governing rules and regulations. The Code will be applicable within 90 days of being adopted by the payment card networks and their participants.

As far as the enhancements to the Code announced on April 13, 2015 are concerned, they will be applied within 9 months of being adopted by the payment card networks as well as their participants and will be applied to all new merchant-acquirer agreements and all new or reissued premium cards after that 9-month period. But there will be the following exceptions:

Element 1: Acquirers will have an additional 9 months, for a total of 18 months from the date of adoption. In this time period, they have to implement the changes to Element 1. The changes will be applied to all new as well as renewed merchant-acquirer agreements;

Elements 2 and 3: There are measures to facilitate the pass-through of interchange rate reductions to merchants. These measures will enter into force immediately for all agreements that are merchant-acquirer, upon adoption of the Code;

Element 4: This principle will be extended to contactless payments and will enter into force immediately for all merchant-acquirer agreements, as soon as the Code is adopted;

Element 11: This element pertaining to acceptance of contactless payments, will be into force instantly for all merchant-acquirer agreements, upon adoption of the Code;

Element 12: The principle regarding merchants being able to provide notice of non-renewal at any point in the contract period up to 90 days prior to contract expiry will be in force immediately for all merchant-acquirer agreements, with the adoption of the Code. Acquirers will have a time period of 9 months from the date of adoption of the Code to implement the changes that will address fixed-term contracts. These changes will be applicable to all merchant-acquirer agreements.

Element 13: The process that will be handling complaints will enter into force for all merchant-acquirer agreements, within a time frame of 60 days of adopting the Code.Assisting Entities in adhering to the code

In order to assist the entities in adhering to elements of the code, the following definitions have been provided for clarification.

Contactless payment:

A payment that is card based or enabled by a mobile device, payments enabled at the terminal at a point of sale and which require no contact with the payment terminal.

Mobile device:

It’s a portable electronic device used by consumers to facilitate storage and/or transmission of data electronically which enables a contactless payment.

Mobile wallet:

A mobile wallet is a graphical user interface (software application) which represents one or more payment applets to a consumer. The wallet serves the purpose of enabling contactless payment.

Payment applet:

A payment applet is a software application on a mobile device, or within a mobile wallet, which is responsible for enabling contactless payment. It does so by linking a single payment credential (e.g. credit or debit) through a specific payment card network.

Payment credential:

A payment credential is a piece of data that is required to complete a contactless payment. It includes identifying information for the specific payment network, issuer, and cardholder, which is stored securely and accessed by a payment applet or token which is generally associated with a payment applet.

The Financial Consumer Agency of Canada is responsible for the monitoring and the compliance of signatories.

Requirements for Payment Card Networks

By adopting the Code, payment card networks would agree to provide the requested information in relation to actions taken by themselves or participants to the Financial Consumer Agency of Canada, for the purpose of monitoring compliance with the Code. In addition, payment card networks also agree to pay the fees also associated with monitoring compliance with the Code which is determined by the Financial Consumer Agency of Canada.

If you are looking for deeper insight into the Code of Conduct for the Credit and Debit Card Industry in Canada get in touch with Prowse Chowne.