Why the Electronic Transactions Association Is Focusing on Canada

In response to Canada’s moves to introduce further regulation of its payments industry, the Washington, D.C.-based Electronic Transactions Association said this week it is “expanding” its advocacy effort into that country. So far, the ETA’s effort includes hiring a lobbyist to represent the interests of Canadian payments companies and U.S. companies with Canadian operations, Scott Talbott, senior vice president of government affairs at the association, tells Digital Transactions News.

Some two dozen ETA-member companies are based in or have at least some business interests in Canada, the association says. These include major firms such as Toronto-based Moneris Solutions, Paysafe Group, Montreal-based Pivotal Payments, and Square Inc.

For now, Talbott and the lobbyist, Chris Smillie, a principal at Tactix, a law firm with offices in Ottawa and Toronto, are focusing on a proposal the Canadian government’s Department of Finance calls “A New Retail Payments Oversight Framework,” which emerged in the form of a consultation paper last year as part of an effort to more closely regulate consumer-based payments. The paper represents “the largest contemplated change” the ETA sees in Canada’s approach to the payments business, Talbott says.

The sweeping proposal would introduce new regulation covering a wide range of issues, including consumer protection, disclosures, operational standards, and liability. “They cover the waterfront,” says Talbott.

The ETA’s concern is that at least some of the proposals could create confusion by adding to or duplicating existing law. “The consultation draft is headed in the right direction, but we want to ensure the new framework takes into account existing regulation so as not to pile on,” Talbott says. “We’re not against regulation, but we want smart regulation.” Canada already has, for example, a code of conduct governing the credit and debit card business.

The ETA’s interest in the proposal dates almost to when the draft emerged. The association filed comments on Oct. 6, the date they were due, and has asked the Department of Finance to consider both existing regulation and self-regulation before creating new law, Talbott says.

But now the group feels a stronger effort is needed, and hence the decision to hire Tactix. “We’ve been up there lobbying, but the issue has grown big enough that having regular boots on the ground is necessary,” Talbott says.

Adam Atlas, a Montreal-based attorney who concentrates on acquiring matters, applauds the ETA’s expanded focus on Canada, and on the “New Retail Payments Oversight Framework” in particular. “The Framework is problematic,” he says. “There are existing contracts and network rules that serve what the Framework is trying to serve.”

He argues payments innovation is moving fast enough that government regulation would soon grow obsolete. “The ground is always shifting,” he says. “I’d be surprised if the Department of Finance could keep up.”