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Merchant Services

Code of Conduct


Decoding the Code: What the new Code of Conduct means for your business

On April 16, 2010, TD Bank Financial Group announced that it was pleased with the release of a Code of Conduct that will govern the Canadian payments industry.

TD believes that this Code will give merchants a greater voice in the payments market, while also balancing the interests of the other participants in this industry.

"Merchants have expressed very valid concerns about the unclear pricing practices and confusing bills of some acquirers," says Jeff van Duynhoven, President, TD Merchant Services. "This Code will provide greater pricing transparency for merchants and that's a great outcome."

It’s important for Canadian merchants to understand what the Code means for them and how changes resulting from the Code will impact them.

TD Merchant Services was an active participant in the government’s process that led to the development of the Code of Conduct. In fact, many of the provisions in the Code are consistent with TD Merchant Services’ current business practices of transparency and choice. As a result, we have the information and advice to help Canadian merchants ‘De-code the Code’ and determine what it means to their business.

The Code itself has 10 policy elements and the intent of these elements is to direct the payment card industry to ensure merchants are:

  • Fully aware of the costs associated with accepting credit and debit card payments, thereby allowing merchant to reasonably forecast their monthly costs related to accepting these payments
  • Provided with increased pricing flexibility to encourage their customers to choose the lowest-cost payment option
  • Allowed to freely choose which payment card option they will (or will not) accept from their customers.

Click for details on the 10 policy elements of the Code of Conduct.

What does the Code mean for merchants?
The Code can be grouped into two broad categories – pricing transparency and choice.

Pricing Transparency

  • The Code clearly states that merchants should be fully aware of the costs associated with accepting card payments.
  • To comply with the Code of Conduct, TD Merchant Services will provide the following benefits to our merchants:
    • Information that is presented in a clear and easy to understand manner
    • Summary of full cost of accepting a particular payment card type, e.g. all fees for Visa or MasterCard Credit including MDR, per item transaction fees, assessment and any premiums or surcharges for unqualified items. See sample below that will group like items together. This will be implemented later this year on our statement:
  • We provide detailed disclosure on our statements and refer to the specific card types such as: Visa Infinite Electronic or MasterCard Commercial Standard. At TD Merchant Services we do NOT use common industry terms such as “unqualified” or “near qualified” to disguise or otherwise complicate pricing and monthly statements. See sample below that will illustrates use of these terms on our monthly statement:
  • Disclosure on monthly statements to include Effective Discount Rate – ‘total’ percentage rate for each payment card type as a measure their total fees vs total sales. See sample below that will be implemented later this year on our statement:
  • Defining types of payment cards to include: Visa Credit, Visa Debit, MasterCard Credit, MasterCard Maestro and Interac Direct Payment as these are the discrete payment card choices that merchants can accept.
  • At least 90 days notice of pricing increases specific to debit and credit card processing fees and full disclosure so merchants can understand the nature of the change.
  • The ability to exit their agreement with us (if desired) without penalty between the pricing increase notification date and the pricing effective date.

Customer Choice

  • The Code ensures merchants are able to direct customers to various payment options and freely determine which credit and debit payment options they wish to accept
  • The benefits to merchants include:
    • As new card payment options are introduced to the Canadian market, merchants will be presented with real choice, including a clear and transparent pricing structure with all of the applicable features, benefits and terms, so that merchants can make an active decision about whether they wish to accept that payment type
    • Information is provided with a sufficient period of time to allow merchants the opportunity to fully understand the information provided, ask questions and make an informed decision.

TD Merchant Services fully supports the Code of Conduct.