What Does the Code Mean For Merchants
of Conduct for the Credit and Debit Card Industry in Canada
As of August 16, 2010
- Merchants will receive a minimum of 90 days notice of any new fees or fee
increases related to credit or debit card transactions. If a fee change is made
in accordance with a pre-determined fee schedule included in the merchant's
contract with an acquirer, notification is not
- Merchants are allowed to cancel their contracts without penalty within 90
days of receiving notice of a new fee or a fee increase. This right to
cancellation does not apply if a fee increase is made in accordance with a
pre-determined schedule included in the merchant's contract, such as a
schedule based on merchant sales volumes.
- 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. A
merchant can choose to accept only credit or debit payments from a network
without having to accept both.
- 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.
- 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.
- This Element
of the Code of Conduct applies to new products and services that payment
card network operators offer to merchants. For example, a merchant's express
consent would be required for acceptance of contactless cards if the merchant
had not accepted any contactless cards previously from the specific payment card
network that is introducing them.
- It does not apply to new products and services offered
to consumers, such as a new credit card product.
By February 17, 2011
- Payment card networks will make all interchange rates applicable to their
products and any upcoming changes to these fees easily available on their web
- Merchant statements from their acquirers will include the following
information presented in a clear and simple manner:
- effective merchant discount rate for each type of
payment card from a payment card network
- interchange rates and any other rates that acquirers charge the merchant
- the number and volume of transactions for each type of payment
- the total amount of fees applicable to each rate
- details of each fee, including the payment card network to which they
that enable merchants to accept payments by credit or debit card, by providing
merchants with access to a payment card network for the transmission or
processing of payments.
Interchange rate: the fee paid
to cover the costs of processing the transaction and credit risk in a credit or
debit card transaction. For purchases, the fee is paid to the financial
institution that issued the purchaser's card. The interchange fee is
included in fees that merchants pay to their acquirer, which then pays the
Effective merchant discount rate:
calculated as the total fees paid by the merchant to an acquirer,
related to the processing of a specific type of payment card from a payment card
network, divided by the total sales volume for that type of payment card.