Some readers of the blog may recall our post detailing changes to the fee structure for credit cards in Canada, designed to make processing of payments more affordable and give incentives to consumers. As of yesterday, Finance Minister Joe Oliver announced a new set of credit card regulations that address merchant- and consumer-side concerns about payment processing, including rules for the rapidly expanding mobile payment sector. Despite the relatively high cost of payment processing in Canada relative to the rest of the world, Canadian small businesses stand to be able to take advantage of many of these regulations.
The Ministry of Finance reports that the new regulations include:
- A new requirement that the interchange rate reductions announced by Visa Canada and MasterCard Canada in November 2014 will be fully passed-through to merchants, or merchants can cancel their contract without penalty;
- A new complaints handling process available to merchants with Code-related complaints;
- Enhanced disclosure requirements that will require plain language disclosure in information summary boxes in merchant contracts of key contract terms and conditions and merchant fees;
- Greater flexibility for merchants to exit their contracts without penalty, including a right to provide notice of non-renewal at any point up to 90 days prior to contract expiry, and limiting automatic renewal of contracts to six-month increments;
- A new disclosure requirement for credit card issuers, to inform consumers that apply for premium credit cards that the use of these cards can impose higher merchant fees;
- New branding requirements for premium cards, to make these cards more easily identifiable to merchants at the point of sale;
- New consumer protections for mobile payment users, to ensure that consumers will have full and unrestricted control of the default settings on their mobile wallets and devices;
- New protections for merchants who choose to stop accepting mobile payments.