Ottawa Announces Plans for Adjusting Credit Card Code of Conduct

By: Daniel Rattanamahattana on September 20, 2012

Technology keeps on changing and with it the laws surrounding older methods of doing business must adapt and change too. Only two years ago Ottawa announced the launch of a credit and debit code of conduct in the aftermath of the U.S. credit crisis to avoid a similar crash here in Canada. But they didn’t expect smartphones to become their own version of a credit card; now the law is being amended to include that.

On Tuesday September 18, Ted Menzies the Minister of State for Finance announced the government was launching what he called ‘a public consultation process.’ In the next 60 days Canadian consumers and small business owners are encouraged to join in the discussion to establish laws that better reflect the new technological reality, a move that has been openly welcomed by the Canadian Federation of Independent Business.

Menzies said the new rules are meant to support customers and business owners to ensure both sides have flexibility in choosing how they want to pay. “Once we have reviewed and evaluated all submissions, we will set about revising the code so that Canadians and small businesses can use mobile payment offerings.”

Research on the smartphone form of payment known as the digital wallet, has been conflicting. A Google study found that Canadians aren’t exactly excited about allowing their phones access to financial and personal identification information. In a survey of 1000 smartphone users only 20 percent said they had used their phone when making a purchase and only 16 percent said they were looking to do so again.

In contrast MasterCard’s study called the Mobile Payments Readiness Index ranked Canada second in the world for being ready to embrace the digital wallet, trailing only Singapore in rankings. However, much of the positivity seemed to come out of Canadian banks, governments, business and regulatory environments; MasterCard says the consumer readiness results showed less than 15 percent of Canadians were willing to use their smartphones as wallets, which is actually 2 percentage points lower than the global average.

While the business community seems ready to embrace the age of the digital wallet, Canadian consumers have yet to jump on board in trusting the new technology’s security. Ottawa may be in for a longer consultation process than they originally thought.

Canadians can submit views and suggestions to the government online at www.codeconsult@fin.gc.ca.

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