Merchant rights under the Code of Conduct for the Credit and Debit Card Industry in Canada

​​The Code of Conduct for the Credit and Debit Card Industry in Canada, which all payment card networks operating in Canada have adopted, sets out several rights that merchants have in relation to their contracts for payment card processing services. FCAC’s Commissioner has issued further guidance on some of the issues addressed by the Code to clarify the expectations of payment card networks and of the service providers that enable merchants to access the networks. 

Your right to receive information in statements

Merchant statements from their payment service providers must include the following information presented in a clear and simple manner:
  • the effective merchant discount rate that applies to each type of payment card from a payment card network
  • interchange rates and all other rates that payment service providers, such as acquirers, charge the merchant
  • the number and volume of transactions for each type of payment transaction
  • the total amount of fees applicable to each rate
  • details of each fee, including the payment card network to which they relate. 

Your right to access information on rates and fees

Payment card networks must make all standard interchange rates and acquiring network assessment fees applicable to their products and any upcoming changes to these rates and fees easily available on their websites.

Your right to be notified about changes related to fees and rates

Merchants must receive a minimum of 90 days’ notice of any new fees or fee increases related to credit or debit card transactions, or of a reduction in applicable interchange rates. 

The 90-day period will begin when the merchant has been provided with sufficient information about the change in fees to allow the merchant to reasonably assess the cost implications of the change.  See the FCAC Commissioner’s guidance on the 90-day notice period for additional information.  

If a fee change is made in accordance with a predetermined fee schedule included in the merchant’s contract with an acquirer, the 90-day notification is not required.  

Your right to receive a summary of packages that include multiple contracts

When a payment service provider offers a merchant a package that includes contracts with more than one party, the merchant must be given a consolidated summary of key information about each contract before an agreement is entered into. 

Specific information to be provided in this summary includes:

  • the name and contact information for each payment service provider, and the nature of the services it provides
  • the effective date of each agreement
  • information on the expiry and renewal of each agreement (for example, if the agreement will be renewed automatically unless the merchant cancels by a certain date). Check carefully to see if the agreement builds in any fee increases at renewal.
  • detailed information on applicable fees and rates for each payment service provider
  • how statements will be provided (paper or online)
  • cancellation terms of the agreement with each payment service provider, including any cancellation fees that could apply
  • if services for point-of-sale terminals are offered, general information on buying, leasing or renting options for the hardware (for example, terminals) so that merchants can make informed decisions
  • a complaint-handling process for each payment service provider, including contact information for complaints.

FCAC strongly recommends that this summary be presented in an information box, but this requirement can be met in other formats. See the Commissioner’s guidance on disclosure in multiple service provider agreements.

Your right to cancel your contract

Merchants are allowed to cancel their contracts without penalty following the introduction of a new fee, a fee increase or when a reduction in applicable interchange fees is not passed on to the merchant. 

Merchants have 90 days from the date they receive the notice of the new fee or fee increase to cancel their contract without penalty. This notice should provide merchants with enough information for them to reasonably assess the impact of the new fee or fee increase on their business. FCAC’s Commissioner has issued guidance that if a merchant can assess this impact only at a later date after receiving the notice, then the 90-day period to cancel without penalty should start at that point and not when they received the notice.

This right to cancel does not apply if a fee increase is made in accordance with a predetermined schedule included in the merchant’s contract, such as a schedule based on the merchant’s sales volumes. 

Merchants will also have the right to give service providers 90 days’ notice of contract cancellation and to cancel their contracts without penalty, if payment service providers do not pass on the full savings from any reduction in applicable interchange rates.

As part of this right, merchants cannot be charged penalties for any related service contracts with payment service providers, such as terminal leases or third-party payment processing.

FCAC’s Commissioner has issued guidance on scenarios where a payment service provider has arranged for a package of related payment processing services that resulted in the merchant having contracts with more than one organization. For more information, see the FCAC Commissioner’s guidance on enhanced disclosure and the right to cancel contracts without penalty

Your right to refuse credit or debit card payments

Merchants who accept credit card payments from a payment network are not required to accept debit card payments from the same network, and vice versa. 

The same applies to credit or debit payment credentials accessed through a mobile wallet or mobile device.

Your right to provide discounts

Merchants are 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 payment card networks.

If merchants choose to offer these types of discounts, they must clearly display the discounts at the point of sale.  

Your right to refuse new products or services

If payment card networks introduce new products or services, merchants are not required to accept those new products or services. Negative option acceptance is not allowed.

A merchant must explicitly consent to accept new products or services.

This element of the Code of Conduct applies to new products and services that payment card networks offer to merchants.

It does not apply to new products and services offered to consumers, such as a new credit card product.

Your right to refuse contactless payments

Merchants are not required to accept contactless payments or upgrade payment terminals to accept contactless payments.

Merchants can cancel their acceptance of contactless payment for all payment card networks with 30 days’ notice, while keeping the rest of their contract the same. By canceling acceptance of contactless payment, merchants will be able to accept only credit and debit card payments that use chip and PIN.

If fees to accept payments made with mobile wallets or mobile devices increase in comparison to those for contactless payments made with a physical credit or debit card, merchants are allowed to cancel payment acceptance for mobile wallets and mobile devices. This means that merchants will not be able to accept mobile payments, but will still be able to accept payments made with physical credit and debit cards using either contactless payments or chip and PIN.

Merchants can opt out of accepting contactless payments made using a mobile wallet or mobile device with 30-days’ notice without penalty.

Your right to provide notice of non-renewal

Merchants are allowed to provide notice that they do not intend to renew their contract with their payment service provider.

Merchants can provide this notice at any time during the contract, except during the final 90 days of the contract period.

What to do before you accept an agreement

Before accepting any agreement with a payment service provider, merchants are strongly encouraged to read the merchant agreement completely and carefully to ensure they understand its terms and their obligations.

If you do not receive an agreement, ask for it.

If the agreement is online, print a copy, save it and make a note of the date for your records.

Ask questions about any points that are not clear, and make sure any commitments or modifications to the terms are included in the written agreement.