By Louise Egan
OTTAWA (Reuters) - Canada laid down new guidelines for credit and debit card firms on Thursday aimed at helping retailers minimize costs associated with the use of these cards by increasing flexibility on fees and charges.
The voluntary code of conduct would include measures to give merchants a choice with regards to which payment vehicle they use, provide online information on the interchange fees charged to them and require credit card companies to give 90 days notice of any fee changes.
The code would apply to players like Visa Inc
"If we are unsuccessful ... with a voluntary code, then we can create an involuntary code. We have that power to do that. But we'd rather do it in concert with the important stakeholders," Canadian Finance Minister Jim Flaherty told reporters at a briefing held in a toy store at an Ottawa mall.
Flaherty said revisions to the code may be made over the next 60 days as it is circulated.
MasterCard said that although the requirements are voluntary it should be treated seriously and as a "de facto standard of conduct".
"MasterCard will review how the code of conduct for the credit and debit Card Industry could alter the competitive landscape and will take measures to safeguard its continued ability to deliver value and innovation," Kevin Stanton, president of MasterCard Canada, said in a statement.
Many retailers would now like to see an oversight body to ensure the code is applied, said Catherine Swift, president of the Canadian Federation of Independent Business. She said the lobby group for small business had suggested a parliamentary committee.
"The light is being shone and the rock is being lifted now. We've seen voluntary codes work before," she said.
"We feel this is a first step. They say they don't want legislation. OK, you prove it by adhering to a voluntary code.
David Wilkins, senior vice-president at the Canadian Council of Grocery Distributors, said the move would allow merchants to shop around when making payments.
"The most important part of the announcement is that it really changes the dynamic of competition within the payment field," he said.
Flaherty has also recently waged battle with the country's big commercial banks in favor of insurance brokers, promising to prohibit the banks from marketing insurance products on their websites.
(With additional reporting by Frank Pingue and Scott Anderson; Editing by Jeffrey Hodgson)
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