Payments Canada proposes new rule for debit payments in Canada

The underlying goal of the Proposed Rule is the transition towards digital payments and decreasing reliance on cash transactions. In conjunction with the Proposed Rule, Payments Canada released a consultation paper on Delayed Authorization POS, which is open for feedback until June 23, 2019.

The Proposed Rule relaxes the current requirement that POS transactions be submitted and authorised in real-time. This allows merchants to offer debit payments in situations in which real-time authorisation is not feasible and therefore increases the available options for consumers.

Other key aspects of the Proposed Rule:

• while the amount of the transaction must still be accessible to the payer, there is no longer a requirement that the total amount be displayed to the payer prior to authorization;

• enables both PIN and PIN-less POS Debit Payment Items, rather than just PIN-less;

• changes the requirement for notification to the customer of the disposition of the transaction following authorisation or non-authorization; under a delayed authorisation system, it may not be possible to know in real time if a transaction has been authorised or declined;

• will allow for multiple submissions of a transaction (for example, a consumer making a purchase may have their payment declined and attempt the transaction again); in a delayed authorisation environment, the merchant can resubmit the transaction without a need for the consumer to be physically present;

• would operate as an opt-in system; financial institutions and merchants are not required to offer delayed authorisation POS payments but may choose to do so.