By Paul Vieira
OTTAWA--Canada on Monday introduced an update to the rules
governing credit-card transactions to reflect the growing use of
mobile payments and to give the country's merchants additional
powers in dealing with the payments industry.
The changes, first reported by The Wall Street Journal back in
November, would give merchants greater flexibility to opt out of
their contracts with payment processors without penalties if fees
are raised. Under the changes, merchants can refuse to accept
mobile payments if the processing cost exceeds that of other forms
of payments. Rules governing credit cards will be extended to apply
to the growing mobile-payment field, the Canadian government
said.
Last November, Visa Inc. and MasterCard Inc. voluntarily agreed
to lower the swipe fees they charged Canadian retailers, avoiding
the imposition of lower fees by the Canadian government.
Those changes, and the ones announced Monday, are meant to
appease small-business owners and retailers who say high processing
fees hurt their bottom lines. They should also "mean more money in
Canadians' pockets and competitive retail markets, benefiting all
Canadians," said Canadian Finance Minister Joe Oliver, who presents
the government's 2015 budget plan next week.
The contents of the budget plan will likely form the backbone of
the ruling Conservative Party's re-election platform in a vote in
the fall.
The rules on credit cards are being updated, the government
said, to reflect changes in the payment card market since 2010,
such as the emergence of mobile-payments technology.
Payment networks don't currently charge higher fees for
mobile-based payments than for transactions made using the physical
version of the same credit card. But many merchants expressed fear
the fees will increase once the use of mobile payments spreads.
A representative for Visa in Canada said the amendments are in
keeping with Visa's position that Canadian merchants and consumers
should have access to and benefit from the most recent innovative
payment technologies. In a statement, the president of MasterCard's
Canadian division, Betty DeVita, said the company believes the
revisions will make the payments industry "more transparent while
maintaining the value and benefit of new payment technologies to
merchants."
Write to Paul Vieira at paul.vieira@wsj.com
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