Decoding the Code: What the new Code of Conduct means for your
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
- 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
- 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.
- 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
- 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
- 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
- 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.
- 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