The government recently moved to update the code of conduct for the credit card and debit card industry to include mobile payments.
The original rules designed to protect cardholders and merchants were introduced in 2010 to promote merchant choice and provide transparency around fees. For example, the rules allow merchants to provide their customers discounts for different methods of payments as well as different levels of discounts for different card networks.
The terms of the code, including the new requirement that stipulates acquirers must pass on Visa and MasterCard’s November 2014 credit card interchange reductions to merchants, now apply to mobile payments as well.
The update is expected to provide regulatory certainty for the still emerging mobile payments market in Canada particularly as the Apple Inc.’s popular Apple Pay service is slated to rollout in the country later this year.
There is very little mobile payments being done in Canada at the moment because NFC-enable mobile phones “aren’t available in sufficient quantities yet,” according to Christie Christelis, president of the consultancy firm Technology Strategies International. Christelis said consumers also lack awareness about NFC payments and “need to learn how to load their card credentials onto smart phones.”
Dan Kelly, president of the Canadian federation of Independent Business, said the updated code will help merchants fight against new mobile fees.
“Our fear was there will be a big fee-apalooza when mobile payments go mainstream,” he told the Canadian Press. “The new rules make that less likely.”