The Canadian government plans to expand the Code of Conduct for the Credit and Debit Card Industry in Canada (Code) to include mobile payments, recognizing that consumers are increasingly using their cellphones, rather than cash or a card, to pay for goods or services. Phones are becoming digital wallets.  

Proposed Regime

The Code, introduced in 2010, contains principles of transparency and fairness intended to assist merchants in choosing payment options and to promote flexible options for consumers. It does not expressly address mobile payments.

The newly proposed Addendum to the Code extends it to mobile payments in two ways: (i) it provides that all references to "payment card" networks and network rules will include payment applications that can be accessed by consumers using a mobile device; and (ii) it provides "clarifications" of specific aspects of the Code, including the following proposed elements:

  • Payment card network rules will ensure that merchants who accept credit or debit card payments from a particular network through a mobile device will not be obligated to accept all products available in that payment network’s mobile wallet.
  • Competing domestic debit apps can be stored on, or accessed by, the same mobile device, provided that they are shown as separate apps and consumers can select which payment app they want to use for a transaction.
  • The principle of equal branding will apply to the representation of payment apps available on or through a mobile device.
  • Payment card network rules must ensure that consumers have full discretion to establish any default preferences for payment options, including easy processes to change defaults.
  • Credit and debit payment apps can be stored on, or accessed by, the same mobile device provided that they are clearly separate apps, and credit and debit card functions must not co-reside on the same payment app.

Public Consultation

The proposed Addendum has been released for public comment on all aspects of the proposed changes, but the government has solicited specific comments in two areas:

  • whether the Addendum should apply to entities enabling mobile payments other than credit and debit card networks and to their participants that offer mobile payments at the point-of-sale; and
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  • whether express merchant consent should be required if fees are the same and no new infrastructure purchases are needed.  

The public consultation period is open until mid-November 2012. Comments can be submitted to codeconsult@fin.gc.ca