April 20, 2010

Government Releases Credit and Debit Card Code of Conduct
to Benefit Businesses

Ottawa (April 20, 2010)— Ed Komarnicki, Member of Parliament for Souris-Moose Mountain and Parliamentary Secretary to the Minister of Human Resources and Skills Development and to the Minister of Labour, was pleased to highlight recent action the government has taken to introduce a Code of Conduct for the Credit and Debit Card Industry in Canada. The Code promotes fair business practices and ensures that merchants and consumers understand the costs and benefits associated with credit and debit cards.

“There has been widespread concern raised by business owners in Souris-Moose Mountain about rising credit card merchant fees and fees associated with debit cards,” said Komarnicki. “The last thing our business operators need is an increase in their operating costs. This Code of Conduct seeks to provide fairness for merchants and it encourages greater choice and competition.”

Under the code, merchants will be:

• Provided with clear information regarding fees and rates;
• Notified of any new fees and fee increases;
• Able to cancel contracts without penalty should fees rise or new fees be introduced;
• Allowed to choose to accept only credit or debit payments from a network without having to accept both.

Canadians may not realize that merchants must pay a cost to accept credit and debit card payments. The Code of Conduct the government has introduced gives merchants the freedom to choose which card networks they use, helps them control their costs, and allows them to pass on savings to their customers.

The credit and debit card industry will have until May 17th to review and adopt the Code of Conduct. The government is confident that payment card networks, credit and debit card issuers, and payment processors will adopt the Code voluntarily, given the high standard of financial services in Canada, and everyone’s interest in avoiding a regulatory burden. The government has, however, taken steps to ensure that it has the legislative authority in Budget 2010 to regulate the industry if necessary.

The Code of Conduct has received positive reviews from various stakeholder groups. Diane Brisebois, president and CEO of the Retail Council of Canada, called Mr. Flaherty's code "a huge victory for us." Catherine Swift, president and CEO of the Canadian Federation of Independent Business, was quoted as saying, "We got almost 95% of what we wanted." Anu Bose, a spokesperson for Option Consommateurs, was quoted as saying, "It is much better than we expected."

“The release of this Code will ensure a stronger, more transparent and more competitive credit and debit card market,” said Komarnicki. “It is a win for businesses and consumers alike as businesses will have greater control of their costs and can pass on savings to consumers.”

For more information on the Credit and Debit Card Code of Conduct, please visit http://www.fin.gc.ca/n10/10-029-eng.asp.

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