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CFIB pushes for stronger code of conduct


July 20, 2012
By Canadian Garden Centre & Nursery

July 20, 2012, Toronto — The Canadian Federation of Independent Business
(CFIB) is calling on Finance Minister Jim Flaherty to strengthen the
government’s credit and debit card code of conduct.

The Code of Conduct for the Credit and Debit Card Industry in Canada,
released in 2010, was created to address merchant concerns related to
the business practices of credit and debit card networks, issuers and
acquirers. Now, the CFIB is seeking enhancements to the code ahead of
growing mobile payment options and a coming ruling from the Competition
Tribunal.

“The code that CFIB initially proposed, and the government implemented,
was a worldwide first that helped save low-cost debit in Canada and gave
merchants some degree of power in dealing with the industry,” said Dan
Kelly, CFIB’s new president and CEO. “The code has been incredibly
helpful to small firms, but is in need of enhancements to ensure it
remains relevant and effective.”

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CFIB’s call for additional measures in the code of conduct was buoyed
last week by a massive U.S. settlement that will allow American
merchants the possibility of surcharging for credit card acceptance.
CFIB called for a similar measure in its original draft of the code.

Canada’s Competition Tribunal is expected to rule on similar provisions in the months ahead.

“We believe the best course of action is to allow for limited surcharges
and the right to refuse certain high cost cards in the code itself,”
Kelly said. “We do not expect many small firms would ultimately use
these powers, but the fact they exist would help Canadian merchants push
back against the estimated $5 billion they and consumers pay each year
in transaction fees.”

In addition to the right to refuse high cost cards or add limited surcharges, CFIB is recommending:

  • Adding new provisions to address rapidly growing mobile payment options
  • Strengthening provisions related to card processor practices, as
    some players are allegedly using loopholes to avoid the merchant
    protections of the code
  • Developing more effective dispute resolution processes

“In the past two years, CFIB has become the payment industry’s
unofficial watchdog, and this role has allowed us to stay on top of
credit and debit card developments,” Kelly said. “These are reasonable
reforms and we’re hopeful government will take our advice and create a
more level playing field between the payment industry and hard-working
small business owners.”


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