Personal Finance

Jim Flaherty's new code on conduct for debit/credit cards

  • Last Updated:
  • Oct 18th, 2010 12:31 pm
[OP]
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Jim Flaherty's new code on conduct for debit/credit cards

If you lads didn't heard in the news the other day,
Federal finance minister Jim Flaherty has unveiled the "Final" code for Canada's new code of conduct for debit and credit cards.

I'll give you a brief breakdown:
  • Merchants are free to accept whatever credit or debit card to accept for consumers
  • Will prevent Visa and MasterCard on forcing merchants to accept their credit cards to opt in for the debit card scheme (Visa Debit and Maestro).
  • Code is voluntary, but one month grace period will be in place - to encourage credit and debit card companies to comply with the new code or else legislation will force them to comply.
While this translates into good news for many merchants, us consumers are starting to feel the "pinch" too. This new code will probably delay Visa and MasterCard's entry on "tapping towards" Canada's popular debit card market.

This leaves us with no choice. Take Air Canada for instance, it transitions to Credit-card only transactions on board their flight cabins (whether to pay for duty-free items, on-board meals, etc.). Air Canada has stated that by accepting only credit cards, this minimises the slowdowns for flight crews and such.

What does everyone have to say about this new code?

References:
"Credit, debit card firms face new conduct code." CBC.ca. 16 April 2010. 28 April 2010. <http://www.cbc.ca/consumer/story/2010/0 ... -code.html>

"Credit/debit code of conduct: FAQs" CBC.ca. 16 April 2010. 28 April 2010. <http://www.cbc.ca/consumer/story/2010/0 ... nduct.html>

"Canada will regulate credit card companies: Flaherty." CBC.ca. 22 April 2010. 28 April 2010. <http://www.cbc.ca/canada/story/2009/04/ ... -0422.html>

"Flaherty's credit-debit code tougher than expected." Toronto Star. 16 April 2010. 28 April 2010. <http://www.thestar.com/business/persona ... n-expected>

"Adopt code or we'll regulate, Flaherty tells credit card industry." Vancouver Sun. 16 April 2010. 28 April 2010. <http://www.vancouversun.com/business/fp ... /story.html>

"Air Canada flights to refuse cash." Toronto Sun. 28 April 2010. 28 April 2010. <http://www.torontosun.com/news/canada/2 ... 744426.html>
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mada726 wrote: What does everyone have to say about this new code?
I say good. The more we can keep Visa/MC's grubby paws off the debit system in Canada the better off everyone as a whole will be.

Sure, maybe if you had a Visa Debit you would somehow get rewards for debit, but you would end up paying more overall in prices. There is no such thing as a free lunch, and right now debit is low cost and low overhead since it is basically a non-profit organization. Not true with Visa/MC debit.

I don't see what this has to do with Air Canada and on-board purchases. Who actually does that anyway?
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[OP]
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brunes wrote:
I don't see what this has to do with Air Canada and on-board purchases. Who actually does that anyway?
Let me rephrase this, OK?

Air Canada has decided to shift their on-board purchases to credit cards only. That means, you cannot pay the purchase using cash or debit cards as a result.
Air Canada wants to optimise the flow for flight crew and reduce the number of change and bills to a minimum.

You could opt to get the prepaid vouchers for paying for on-board purchases - but there is one drawback - a credit card is required to purchase those vouchers and yes, you have to get those vouchers - online.

I wonder this policy also fall for so-called "pre-paid" credit cards (i.e. Vanilla MasterCard, myTreat VISA, etc.)

If passengers don't have a credit card, then they have no other choice but to take food on board or have food/drinks included in the ticket price. These rules however, don't apply to Air Canada's regional subsidiary, Air Canada Jazz.

I already have two "physical" credit cards on me (one VISA and one MasterCard) and that doesn't apply to me - but I haven't flew with Air Canada in the past six years....
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Wow, I haven't heard of Air Canada only accepting credit card for the in-flight services. I think that's a bad move though, there are lots of people that don't have CCs, and well, they need to eat too...

But I guess overall this code of conduct won't result in many changes for the average user. If I'm understanding this correctly.
:lol:
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Hairball wrote: Wow, I haven't heard of Air Canada only accepting credit card for the in-flight services. I think that's a bad move though, there are lots of people that don't have CCs, and well, they need to eat too...
well food will still be provided for free on long flights. It's just for short flights where thet give u pretzels...or if u want wine u have to buy.
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Hairball wrote: Wow, I haven't heard of Air Canada only accepting credit card for the in-flight services. I think that's a bad move though, there are lots of people that don't have CCs, and well, they need to eat too...

But I guess overall this code of conduct won't result in many changes for the average user. If I'm understanding this correctly.
Cash handling is a royal PITA... Based on what I know in general about the industry, there's probably 20-30% overhead in cash handling vs automated credit card, so moving to CC only saves them money even if there's a 20% drop in sales.

Oddly enough, I think they'll still accept cash for the $3 disposable earphones...

In other news, yesterday I made $4 profit on a WestJet flight from the pretty girl next to me who wanted to watch Sherlock Holmes and didn't have a CC for the seatback pay-per-view. She gave me a $10 and refused my offer of $4 change based on the $5.95 movie price.
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angel_wing0 wrote: well food will still be provided for free on long flights. It's just for short flights where thet give u pretzels...or if u want wine u have to buy.
There is no food on any flights within North America or the Caribbean, not even the 5+ hour transcontinental flights. And booze is $$$ as well.

Meals and alcoholic beverages are still provided free of charge in Y on transatlantic, transpacific, and most South America flights.
A glass of wine with you, sir, and the ladies I'll enjoy.
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mada726 wrote: [*]Code is voluntary, but one month grace period will be in place - to encourage credit and debit card companies to comply with the new code or else legislation will force them to comply.
At first i had no idea what you were talking about...

after reading some of the references i now understand what you are talking about.

Small victory.
Though i have to say, this new code and the air canada's cc only transactions seem to be different issues. not unrelated of course.

as a consumer i have no real concern, i have a debit, mc, visa card..
i would be interested to know what new fees visa charges to merchants for use of their debit visa.
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angel_wing0 wrote: well food will still be provided for free on long flights. It's just for short flights where thet give u pretzels...or if u want wine u have to buy.
Try taking a flight from Toronto to Vancouver, I wouldn't call that a "short" flight ;)

It's only most international ones that have food with the ticket.
:lol:
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mada726 wrote: Let me rephrase this, OK?

Air Canada has decided to shift their on-board purchases to credit cards only. That means, you cannot pay the purchase using cash or debit cards as a result.
Air Canada wants to optimise the flow for flight crew and reduce the number of change and bills to a minimum.

You could opt to get the prepaid vouchers for paying for on-board purchases - but there is one drawback - a credit card is required to purchase those vouchers and yes, you have to get those vouchers - online.

I wonder this policy also fall for so-called "pre-paid" credit cards (i.e. Vanilla MasterCard, myTreat VISA, etc.)

If passengers don't have a credit card, then they have no other choice but to take food on board or have food/drinks included in the ticket price. These rules however, don't apply to Air Canada's regional subsidiary, Air Canada Jazz.

I already have two "physical" credit cards on me (one VISA and one MasterCard) and that doesn't apply to me - but I haven't flew with Air Canada in the past six years....
Seems like the only thing you're pissed about is that now you can't use cash or debit on air canada flights.

How much do you usually buy on a flight? And how often do you fly? Jeeze..
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Hairball wrote: Try taking a flight from Toronto to Vancouver, I wouldn't call that a "short" flight ;)

It's only most international ones that have food with the ticket.
well since i go to hk often enough, 4 hours is not really that long imo...
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corrupt123 wrote: Seems like the only thing you're pissed about is that now you can't use cash or debit on air canada flights.

How much do you usually buy on a flight? And how often do you fly? Jeeze..
Yeah... Cash handling on-board is quite a challenge (tracking, leakage, etc) so any sane company wants to avoid it. The downside of loosing some sales doesn't come close to eroding the upside.

Debit handling is also a pain as well (compared to straight credit) from a technical point of view, and that affects the marketplace for integrated solutions that offer debit. Popularity in Canada is irrelevant: I suspect the number of solution providers (competing for airline business worldwide) for "cashless cabin" that support Canada's debit standards is... nil... So CC-only is the way to go.
A glass of wine with you, sir, and the ladies I'll enjoy.
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Hairball wrote: Try taking a flight from Toronto to Vancouver, I wouldn't call that a "short" flight ;)

It's only most international ones that have food with the ticket.
Even worse, flights to Hawaii. Seems silly on Air Canada's part for flights that are 4+ hours.
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mada726 wrote: I wonder this policy also fall for so-called "pre-paid" credit cards (i.e. Vanilla MasterCard, myTreat VISA, etc.)

If passengers don't have a credit card, then they have no other choice but to take food on board or have food/drinks included in the ticket price.
pre-paid credit cards just work like a normal credit card, but there is an activacation fee and of cuz, u have to pay first.

It's really hard to find someone without a CC right now except kids, and i like the idea to be honest, way better than hearing them count change on the plane.
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hoob wrote: In other news, yesterday I made $4 profit on a WestJet flight from the pretty girl next to me who wanted to watch Sherlock Holmes and didn't have a CC for the seatback pay-per-view. She gave me a $10 and refused my offer of $4 change based on the $5.95 movie price.
What do you mean she refused it?

Sounds like perfect opportunity for "well at least let me buy you a drink when we get off the plane..."
To be nobody but yourself - in a world which is doing its best, night and day, to make you everybody else - means to fight the hardest battle which any human being can fight; and never stop fighting. -- E. E. Cummings

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