Thank you, Ms. Hamel.
Mr. Chair and committee members, my name is Nicolas Marion. I head the payments policy section at the Department of Finance. Our section plays an important role in supporting a secure, efficient and well‑functioning payments ecosystem that serves the needs of consumers, merchants and businesses. We give the Minister of Finance strategic advice and analyses on issues related to payment cards, payments clearing and settlement systems and the regulation of payment service providers.
With respect to credit and debit cards, I'll highlight two policy instruments. The first is the code of conduct for the payment card industry in Canada. This code was established in 2010 and has been revised twice, in 2015 and this year, as announced by the government on October 1.
The code of conduct for the payment card industry in Canada provides greater transparency and disclosure to merchants on the fees they pay. It establishes merchant rights regarding fee changes, it allows merchants to freely choose which payment options to accept, and it provides a complaint handling process for merchants. The code has been agreed to by all major payment card network operators and is incorporated into their network rules. The FCAC—the Financial Consumer Agency of Canada—supervises adherence to the code.
The second instrument is the agreed upon commitments by Mastercard and Visa that have materially reduced the interchange rates paid by merchants. There have now been three succeeding sets of agreements, taking effect respectively in 2015, 2020 and, most recently, on October 19.
Our section also supports initiatives related to the payments modernization effort, which aims to improve the security, efficiency and utility of the payments system to better meet the needs of consumers and businesses, particularly in a digital economy.
These initiatives include expanding the financial sector regulatory perimeter by establishing a supervisory regime for payment service providers, administered by the Bank of Canada under the Retail Payment Activities Act; broadening core payment system access by expanding membership eligibility in Payments Canada to other regulated entities, such as payment service providers supervised by the Bank of Canada; and then, finally, supporting Payments Canada's development of a fast payment system called the “Real-Time Rail”.
Thank you for your attention. We look forward to answering your questions.