Finance Department consulting on code for mobile wallet payments

The federal Finance Department has opened a call for comments on its plan to include regulation of mobile payments in the department’s Code of Conduct for the Credit and Debit Card Industry. In a release Tuesday, the Finance Department said it has proposed an addition to the code of conduct to recognize the rising consumer trend of using smartphones for debit and credit card transactions. “More and more Canadians are using their smartphones to pay at stores and small businesses, and that trend will grow,” Ted Menzies, minister of state for finance, said in a statement. “While we support new and convenient payment options, small businesses and consumers should not be punished with new hidden fees or undisclosed conditions.” First implemented in August 2010, the code of conduct lays out rules for how payment card network operators, credit and debit card issuers, and payment processors issue and report on fees that they charge merchants accepting credit and debit card payments. The code also ensures merchants are “given advance notice of any new fees and fee increases” and allows them “to cancel contracts without penalty should fees rise or new fees be introduced,” the department’s website says. The code does not currently cover the use of mobile apps to make credit and debit card payments through smartphone devices. In its proposed addendum, the Finance Department said payment card network operators would work with merchants under the updated code to ensure that agreements between merchants and payment processors “include a sufficient level of detail and are easy to understand.” The department proposed a clarification for mobile in the code for payment card network rules to ensure that merchants accepting credit and 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.” The proposed, updated code also said that competing domestic debit applications can be either stored on or accessed by the same mobile device as long as they are represented as a separate payment application. Consumers should also be able to select which payment application can be used for a given transaction, the department proposed. It also seeks to clarify that credit and debit card functions will not “co-reside” on the same mobile payment application. “Credit and debit payment apps can be stored on, or accessed by the same mobile device, provided that they are clearly separate payment applications,” the addendum said. Under the proposed changes, consumers will have “full discretion” to establish a default preference for their mobile payment options. “Establishing default preferences should be done by users based on a clear and transparent process and users should be able to easily change default settings,” the addendum said. In May, the Canadian Bankers Association (CBA) released voluntary guidelines that it said will serve as “blueprint” for how mobile payment capabilities can be offered in the Canadian market. At the time, the CBA said the guidelines provide a “common framework” for how mobile payments can be used with existing payment systems. Marc Choma, a spokesman for the Canadian Wireless Telecommunications Association (CWTA), said in an emailed statement Tuesday that his organization will review the proposed new rules and consider filing a submission for the government’s consultation. “We are pleased to see that the Government of Canada recognizes the importance that mobile payments play and will increasingly play in Canada’s digital economy,” Choma said. The deadline for comments is Oct. 17. news@thewirereport.ca

Finance Department consulting on code for mobile wallet payments

News | September 18, 2012

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us