Good afternoon, and thank you, Mr. Chairman. I appreciate the opportunity to present to you and your committee today.
As many of you will know, the RCC's, Retail Council of Canada's members are small and large businesses across the country and represent more than 45,000 storefronts of all retail formats, including general merchandise, grocery, specialty retail, independent stores, and online merchants.
The payments landscape has been a major area of focus for RCC for many years. In that regard we applaud the government's efforts to ensure that retailers and their customers have choice in the payment methods accepted in their stores, and we applaud the recent commitment to lower costs associated with payment acceptance that was announced in the recent budget.
With respect to mobile payments, I would like to outline some key areas of concern to the retail community, in particular, operation complexity, the cost of implementation, consumer and merchant choice, and expressed acceptance or consent.
First, let me deal with operational complexity. We are witnessing many trials and tests, but little is being done to ensure collaboration of all stakeholders in the payment supply chain and there is very little discussion about industry-wide standardization. In the short term we believe the technology is likely to diverge before it converges, and this lack of standardization could make the emergence of mobile payments messy for the consumer and inefficient for retailers.
To address this issue, RCC recommends that the government be tasked with ensuring that a standardized platform be defined for mobile applications in Canada.
Second, I will discuss cost. As retailers we have a responsibility to roll out and support technology that makes lives more convenient in a way that does not add additional unnecessary cost into the system. Containment of cost is vital for both consumer prices and retailers' bottom lines.
All payments must be treated the same regardless of the form in which they are made, whether it is by a plastic card or a mobile smartphone. Simply changing the form, in our opinion, cannot be a reason for increasing costs.
Let me give you a specific example. Let's take the card-present versus card-not-present situation. In a traditional payment, the consumer's credit card is either present at the point of sale, or it is not present, as in the case of online shopping in which you key in the number, or in telephone shopping or mail ordering. In the card-not-present case, retailers pay a higher cost to the credit card networks because of the potential for increased fraud and inconvenience for the processor.
Those situations don't exist in a mobile environment, and we really encourage the government to take a strong look. We recommend that mobile payments be treated as a card-present application rather than a card-not-present one. RCC asks the committee to recommend that mobile payments be treated in this way and that this be reflected in an updated payments code of conduct.
The final two areas I'll talk about are consumer and merchant choice.
Regarding consumer choice, it is our view that consumers should be given a range of payment options at the point of sale, regardless of whether they're using a physical or a mobile wallet. RCC strongly believes that networks, issuers, or processors should not set default settings for payments. The only party who should make that choice is the consumer. Again, we encourage the committee to recommend that these options must be set by consumers and that this be reflected in an updated code of conduct.
Not only is it vital that consumers be provided choice when considering mobile payment options, but so also should merchants be. Our final recommendation, Mr. Chair, is that retailers must have the ability to decide to accept mobile payments and that their acceptance not be implied or deemed simply because the retailer is accepting another form of payment, such as the tap and go form. The responsibility to decide whether to accept any form of payment, including mobile, must rest solely with the retailer, and this condition, requirement, or right must be reflected in updates to the payments code of conduct.
I too thank you for the opportunity to address the committee. I also look forward to your questions and the discussion on what is a vital topic for the retail industry.