Merchant rights under the Code of Conduct for the Payment Card Industry in Canada

 

The Code of Conduct for the Payment Card Industry in Canada (the Code) was introduced in 2010. All major payment card network operators (PCNOs) in Canada have agreed to the Code. They are American Express Canada, Discover, Interac, Mastercard Canada, Visa Canada and UnionPay. The Code was revised and updated in 2015 and 2024.

The Code aims to ensure transparency, flexibility, and choice for merchants in managing payment card acceptance. To meet this goal, the Code provides merchants with certain rights.

Your right to information

All information that payment card service providers must disclose to you, as a merchant, must be presented in a clear, simple, and not misleading manner.

Statements

Statements must include:

• the effective merchant discount rate for each type of payment card from a payment card network you accept
• all rates that card payment service providers charge you, including interchange rates
• the number and volume of transactions for each type of payment transaction
• the total amount of fees for each rate
• details of each fee by payment card network

The effective merchant discount rate is calculated as follows. Take the total fees you pay to an acquirer for processing a specific type of payment card from a payment card network. Divide that number by your total sales volume for that type of payment card.

Notification about changes in fees and rates

PCNOs must make all applicable standard interchange rates and acquiring network assessment fees easily available on their websites. PCNOs must also post upcoming changes to these rates and fees on their websites once they’ve been provided to acquirers.

You must receive a minimum of 90 days’ notice of:

• new fees or fee increases related to credit or debit card transactions
• a reduction in applicable interchange rates

The notice must describe the nature of the fee change and the change must be clearly identifiable on your next monthly statement. You also have the right to request in writing that your card processing provider provide you an updated fee disclosure box. The updated fee disclosure box must show the impact of the new fee or fee increase.

A fee change may be made in accordance with predetermined fee schedules included in your agreements. In that case, the acquirer doesn’t have to give you 90 days’ notice.

Card payment processing provider agreements

Before you enter into an agreement for card processing, your agreement must include a cover page with 3 tables. If you receive it electronically, it must be as a separate document with 3 tables.

These 3 tables are:

• Summary of the Key Elements of the Agreement
• Cost per Transaction Disclosure
• Disclosure of Fees

These tables must include:

• the name and contact information for each card payment processing and/or service provider
• the effective date of each agreement
• information on the expiry and renewal of each agreement
• how they’ll provide statements, paper or online
• cancellation terms of the agreement with each payment service provider, including any cancellation fees that may apply
• if they offer services for point-of-sale terminals, general information on buying, leasing or renting options for the hardware
• a complaint-handling procedure for each payment service provider, including contact information for complaints
• information on the cost per transaction for each card offered by each payment card network that you’ve chosen to accept
• detailed information on other applicable fees and rates

You have the right to request these tables or updates to these tables from your payment card processing provider. You can do so at any time during your agreement.

Cancelling agreements

You may cancel your agreements without penalty in the event of:

• a fee increase
• the introduction of a new fee
• a reduction not passed through in full

You may cancel your agreements within 90 days of receiving notice of the fee increase or the new fee.

You may also exit your agreements without penalty if an acquirer doesn’t pass on the full savings from the reduced interchange rates.

You may do so if the reduction:

• applies to you
• was not passed on within 90 days of receiving notice of the interchange reduction

If you cancel your agreement within the 90 days, you won’t have to pay penalties on related service agreements. For example, agreements you may have with 1 or more downstream participants, including but not limited to, terminal lessors or third-party processors. This is for agreements entered into with an acquirer and/or its registered agents, processors or other downstream participants.

You have 90 days to let your card payment processor know if you’re cancelling your agreement. The 90 days start once you receive enough information to understand how the fee changes may have an impact on your business.

This right doesn't apply if a fee increase is part of a predetermined schedule in your agreements.

Renewing card processing services agreements

You have certain rights related to the renewal of your agreements for card processing services.

Notice of non-renewal

You may inform your acquirer or downstream participant that you don’t want to renew your agreement. This includes your main agreement and any related service agreements. You need to do this at least 45 calendar days before your agreement is set to renew.

Fixed-term agreements

If your agreement has a set term, it can’t be automatically renewed for the same length of time as the original agreement. Your agreement may be converted to automatically renew for periods of 6 months or less. You may inform your acquirer or downstream participant any time during these periods that you don’t want to renew. You can do this as long as it’s at least 45 calendar days before the end of the term.

Duration of agreements

Any related service agreement can’t have a term longer than your main card processing agreement. A related agreement is related to but not part of your main card payment processing agreement. If your main agreement doesn’t have a set duration, your related service agreements must also be open-ended agreements without a set term.

These rights don’t apply to services not related to your card payment processing agreement. This is also the case if related services and their price don’t depend on you retaining your main card payment processing agreement.

Choosing which payment options to accept

You may choose to accept domestically issued credit or domestically issued debit card payments from a PCNO. You don’t have to accept both.

Refusing new products or services

Negative option acceptance is not allowed. This means you must provide express consent to accept a new payment processing product or service.

Providing discounts

You may provide discounts for different methods of payment. For example, cash, debit card and credit card. You may also offer different levels of discounts among different card networks.

Filing a complaint

If you feel that your rights under the Code weren’t respected, you have the right to file a complaint.

Your card payment services provider must have a process for handling complaints that is:

• clear
• simple
• easy to access
• easy to understand
• transparent

Learn more about the Code complaint-handling process.

Related links

• Code of Conduct for the Payment Card Industry in Canada