The Canadian Code for the POS Industry came into existence in August 2010 for the purpose of promoting fair business practices by POS providers. Additionally, the Code sets standards that ensure merchants and business owners have a clear understanding of costs and agreements or contracts.
Canmor Merchant Services fully supports The Canadian Government’s Code of Conduct initiatives. The Canadian Point of Sale industry has been plagued with a “wild west” environment. Unscrupulous companies and sales agents routinely encourage merchants to sign agreements the merchant did not understand, or were changed after signing or did not clearly indicate what the merchant would be charged.
Highlights of the Code:
90 Day Notification of Fee Increases
Processors must notify merchants 90 days before any fee can be increased or new fee introduced. Merchants are permitted to cancel their merchant service account without penalty up to 90 days after the fee change or introduction has taken place.
Reporting the Effective Discount Rate
Merchant’s monthly statement must show what the actual total discount rate the merchant paid. The Effective Discount Rate includes all fees that make up the final fee to the merchant such as qualified fee, non-qualified fee, rewards qualified, interchange differential, processing fee and any other fee that a given processor may charge. Merchants will be able to clearly note the actual fee they paid, not the fee that they promised.
Reduction is Some Card Type Interchange Rates
In 2015, Visa and Mastercard were encouraged by the federal government to reduce a few card type Interchange Rates and again in 2016, Mastercard has made a few additional reductions. Merchants that did not receive the full reduction in the selective categories were free to change processors with penalty.
6 Month Contact Renewals
New agreements or contracts are limited to 6 month renewals. Previously, automatic renewals varied between processors (and their associated resellers) from 4 years to as high as 7 years.
IMPORTANT: It is important to understand that if the fee increase or new fee is initiated by a card brand (Visa, Mastercard, etc.), the merchant still has the ability to change processors, BUT, if initiated by the card brand then all processors will adhere to the new fee increase or new fee. The timing of when a given processor introduces the fee becomes a marketing issue with some delaying the introduction in an attempt to pick-up merchants that switch.