The Globe has learned that mobile payments will be addressed as part of an expanded code of conduct for the credit and debit card industry that Finance Minister Joe Oliver will announce Monday in Toronto.The Globe and Mail
The Conservative government is expanding its code of conduct for the credit and debit card industry to cover the growing grey area of paying for items with a smartphone.
The Globe has learned that mobile payments will be addressed as part of an expanded code that Finance Minister Joe Oliver will announce Monday in Toronto.
The provisions would ensure that existing limits on fees related to credit and debit cards also apply to mobile payments, which had not been contemplated when the voluntary code was first announced in 2010.
For consumers, this would mean having control over so-called mobile wallets in terms of choosing which form of payment – such as a particular credit card or debit card – takes priority when they swipe their phones to make a payment.
It is also expected that there will be provisions to ensure that savings as a result of reductions in the cost of credit card fees are returned to merchants.
Visa and MasterCard announced in November that they would voluntarily reduce their fees to an average effective rate of 1.5 per cent for five years. The government said at the time that this would reduce fees by 10 per cent.
The original code was brought in as a response to concern from business owners that they were being forced to pay hefty fees to process credit cards, particularly those that offer generous points rewards to card-holders.
The original code meant that merchants would be given clear information regarding fees and rates and could cancel contracts without penalty should rates go up.
A research paper published last year by the Library of Parliament said that Canadians are among the "early adopters" of mobile payments. However it noted the Financial Consumer Agency of Canada has warned that some mobile payments may not be as secure as the "PayPass" and "payWave" tap technology used by MasterCard and Visa. The paper also noted concerns over privacy protection.
The agency warned that mobile payments create "ambiguity" in areas like liability against loss.
It is not clear whether Monday's announcement would address these consumer concerns or whether they might be addressed in a separate plan the government is working on.
Since 2013, the Conservative government has also held consultations in relation to a broader Financial Consumer Code. There has been growing speculation that an announcement related to that code will be made soon.
The government's consultations asked for input on whether the government "should adopt a set of principles to govern financial consumer protection that would be applicable even where specific regulations have not been enacted."
The consultations also asked whether the Financial Consumer Agency of Canada should have stronger powers to enforce a new consumer code.
Bill Curry