Further problems have been detected as far as the restriction on applying service fees at the retail level is concerned. Many independent stores charge nominal fees to help cover the cost of providing debit payment on low value purchases. In consequence, the renewed governmental provisions require that all fees be itemized to allow complete understanding of the breakdown of the discount rate across all interchange rates and fees.
The Code regulations aim to provide merchants with transparent information regarding fees and rates, previous notice of any new fees and fee increases as well as with the ability to cancel contracts without penalty in case of fees rise or new fees. In addition, the Code is set to enable Canadian retailers to accept credit payments from a particular network without the obligation to accept debit payments and vice versa.
As a major payments technology company, Visa has reacted to the new code claiming that its specifications are not promising enough in creating a competitive environment in the Canadian payments field and that merchants are favoured at the expense of consumers.
The Code of Conduct is the result of consultations with merchant and consumer associations, debit and credit card networks, payment processors and credit card issuers across Canada. The credit and debit card companies will have to review and adopt the Code of Conduct until 17 May 2010.
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