What the Code is
The Code of Conduct for the Payment Card Industry in Canada is a set of commitments about how card payments are sold and run for merchants. Interac says it is “overseen by the Financial Consumer Agency of Canada (FCAC)”. Visa describes the FCAC as “an independent government agency that monitors the commitments made by payment card networks”.
The FCAC says the Code “came into effect in 2010” and “was revised and updated in 2015 and 2024.” Visa’s page gives exact dates: introduced by the Minister of Finance on May 17, 2010, and amended on April 13, 2015 and May 24, 2024.
The FCAC says the Code “aims to ensure transparency, flexibility, and choice for merchants.”
Some words the Code uses:
- PCNO (payment card network operator): a card network, such as Visa or Interac.
- Acquirer: the company that signs up merchants and handles their card sales.
- Downstream participant: the FCAC’s pages name these alongside acquirers as the companies that must give merchants notices and handle complaints. The pages we read do not define the term further.
Who agreed to it
The FCAC says: “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.”
Visa says it “abides by, and requires its participants to comply with” the Code. Interac says it “abides by” the Code.
Your right to information
The FCAC says Code-related information must be presented in a way that is “simple”, “clear” and “non-misleading”.
Quotes and applications. The FCAC says applications, quotes and proposals must include:
- a Cost per Transaction Disclosure, to compare the cost of accepting a given card across providers, and
- a Disclosure of Fees, a list of other fees, such as monthly fees.
Processors must explain how they worked out these costs, such as the card mix and volumes used, and must describe any promotional offers or bundled services, including how long offers last.
The agreement. The FCAC says a card processing agreement must include a cover page (or, if sent electronically, a separate document) with 3 tables:
- Summary of the Key Elements of the Agreement
- Cost per Transaction Disclosure
- Disclosure of Fees
These include, among other things: each provider’s name and contact details, the effective, expiry and renewal dates, how statements are provided, cancellation terms and fees, equipment buying, leasing or renting options, a complaint-handling procedure, the transaction cost of each card, and other fees and rates. The FCAC says merchants can ask for these disclosures or updated tables.
Statements
The FCAC says merchants must receive, or have access to, a monthly statement with:
- the effective merchant discount rate for each card type: the acquirer fees and card network core fees paid, divided by total sales for that card type,
- the rate and total amount charged for interchange (or wholesale discount rates), network assessment fees and all other charges, and
- the number and volume of transactions for each type of payment.
On a blended or flat-rate plan, the statement must show the rate paid per transaction and the fees not included in it. See How to Read Your Merchant Statement.
Notice of fee changes
The FCAC says the Code applies to core fees: amounts set by a card network and the acquirer or processor for accepting and processing card payments. It does not apply to optional services, add-on services, or penalties that could be avoided.
Acquirers and downstream participants must notify merchants 30 to 60 calendar days before the effective date of:
- increases in existing acquirer or processor fees, or in domestic card network core fees passed on,
- new acquirer or processor fees, or new domestic card network core fees passed on, and
- reductions in domestic card network core fees that are not passed on.
The notice must state the old and new amounts, who changed the fee (the card network, the acquirer or the downstream participant), how much of the change is passed on, and the right to give notice of intent to exit within 70 calendar days after the change takes effect.
The FCAC lists cases where no notice is needed: plans that pass on network fee reductions automatically, when no cost goes up and no fee is added, and changes on a schedule set in advance, such as the end of a promotion.
Example: TD. TD’s Fee Change Summary lists each change with a “Date to cancel by without penalty” and reminds merchants: “You may cancel your agreement within 70 days after the date on which a new or increased (i) domestic PCNO Core Fee, or (ii) TDMS Fee, that applies to you takes effect.”
The 70-day exit right and cancelling
The FCAC says that after an applicable fee change, a merchant can give notice of intent to exit the agreement without penalty within 70 calendar days after the change takes effect. The notice of the change must include the date the 70-day period ends. For agreements with no fixed term or cancellation penalty, the processor must remind the merchant of the right to cancel without penalty at any time.
The FCAC says merchants can cancel agreements, including related service agreements, without penalty:
- if they did not get 30 to 60 calendar days’ notice of an applicable fee change, or
- within 70 calendar days of the change, if they did get notice.
After a merchant gives notice to cancel, the acquirer or downstream participant must send cancellation documents within 5 business days. The cancellation takes effect on the date the merchant asked for if the merchant has met their obligations (for example, returned rental equipment and signed forms) and the date is at least 30 calendar days after the documents were submitted, unless agreed otherwise.
Exceptions. The FCAC says penalty-free cancellation does not apply to fee increases on a schedule that is part of the agreement, such as one based on sales volume or the end of a promotion. It also does not apply to services unrelated to card processing.
More on leaving fees: Early Termination Fees.
Renewals
The FCAC says:
- Notice of non-renewal: a merchant can tell the acquirer or downstream participant they do not want to renew, at least 45 calendar days before the agreement renews.
- Fixed-term agreements cannot automatically renew for the same length as the first term. They can be converted to renew automatically for periods of 6 months or less.
- Related service agreements cannot have a longer term than the card processing agreement.
Other rights
The FCAC lists three more:
- Credit or debit. Merchants may choose to accept domestically issued credit or debit cards from a card network. They do not have to accept both.
- No negative option. A new product or service needs the merchant’s express consent.
- Discounts. Merchants may offer discounts for different ways to pay, such as cash, debit and credit, and different discounts for different card networks.
Complaints
The FCAC says card networks, acquirers and downstream participants must have a complaint process that is “clear”, “simple”, “transparent”, “easy to access” and “easy to understand”, and must show a summary of it on their website. The FCAC’s page says to first contact the card payment service provider.
Timelines, according to the FCAC. The provider must:
- acknowledge the complaint within 5 business days, and
- investigate and address it within 20 business days, or 30 business days for card networks.
If they cannot respond in time, they must give the reason for the delay and the expected response time.
The final response must include a summary of the complaint, the final result of the investigation, the final decision with reasons, and how to escalate, including the complaint-handling form.
Card networks. The FCAC says card networks must investigate merchant complaints they receive from acquirers, downstream participants, the FCAC and merchants, and communicate the outcome to the merchant within 30 business days of receiving the complaint.
Visa and Interac publish their own steps. Visa says the acquirer or payment processor “must be contacted initially.” Interac takes complaints by form, by phone at 416-362-8550, or by email at compliance.regulations@interac.ca. Interac says that if it cannot respond within 30 business days, it will explain the delay and the expected response time.
Where to go from here
The fee-change notices and “cancel by” dates appear on statements. How to Read Your Merchant Statement shows where. More on Canada: card processing in Canada and Interac Debit: How It Is Priced. What the Code and other sources say about discounts: Dual Pricing and Cash Discounts in Canada.
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