• Canadian government addressing mobile payment regulation

Canadian regulators are taking small steps towards addressing issues related to mobile payments. Yesterday, Canada's Minister of State (Finance) Ted Menzies announced that the country's Code of Conduct for the Credit and Debit Card Industry will be expanded to include mobile payments. As a part of the announcement, Menzies also released the proposed Addendum to the Code for public consultation.

"Technology continues to evolve and transform our daily activities—including the way we buy items," said Menzies. "More and more Canadians are using their smartphones to pay at stores and small businesses, and that trend will grow. While we support new and convenient payment options, small businesses and consumers should not be punished with new hidden fees or undisclosed conditions."

The government said its purpose in releasing the Addendum was to ensure that the code's principles of transparency and fairness carry over into consumers' access of debit or credit accounts through a mobile device at the point of sale.

Canada's Code of Conduct for the Credit and Debit Card Industry is designed to make the costs of credit and debit cards clear to both consumers and merchants. It was developed in consultation with both consumer and merchant associations and went into effect in August 2010.

The new addedum to the code covering mobile payments comes out of the Canadian government's recent evalution of the nation's payments system. The Task Force for the Payments System Review, which conducted the evaluation, issued a final report earlier this year that included a commitment to assess mobile payments in relation to the Code of Conduct

"Today's actions are welcome," said Corinne Pohlmann, vice president for national affairs for the Canadian Federation of Independent Business, in the announcement. "They show that the Code can evolve, and will address some of the reforms needed to continue to level the playing field between payments operators and small business."

The Canadian government said the comment period for the addendum will last for 60 days, during which time Canadians are asked to submit their views.

"As before, we will consult closely with small businesses, retailers and others to ensure the Code of Conduct continues to allow all parties to understand and manage the costs associated with various payment options," said Menzies.

For more stories on this topic, visit the Regulatory Issues research center.

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User Comments – Give us your opinion!
  • Margaux Panlilio
    There will be a good and a bad side on mobile payment regulation. Good - customer protection and company accountability. Bad - lateralization of rates. Right now, as consumers, we have to be vigilant and wise on choosing our service provider. I am now using mPowa (www.mpowa.com), I am happy so far. Without regulations, they give me good service, lowest rates, and they have accountability if something goes wrong.
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