MasterCard Inc. and Visa Inc. are split on the Canadian Minister of Finance's proposed code of conduct for the card industry.

In comments submitted Monday, Visa, based in San Francisco, called the proposal too restrictive, while MasterCard, of Purchase, N.Y., said "vigorous debit competition can thrive" under the proposed code.

Observers expect the code to open the door to debit card competition in Canada, where a single network, Interac, controls the market.

Visa Canada hopes to reach agreement with a Canadian bank to issue PIN debit cards by the end of March.

The cards would be dual-branded with Visa and Interac, Byron Pollitt, Visa's chief financial officer, recently told analysts.

MasterCard debit cards would carry the Maestro PIN debit brand.

"The draft code suggests that merchants will decide which debit network is used and allows the merchant to override a consumer's choice of payment without consent," Tim Wilson, the head of Visa Canada, wrote in the company's comments. "While Visa strongly supports a merchant's right to choose what method of payments they accept, the code does not appropriately balance the interests of merchants and consumers."

The code may discourage use and acceptance of payWave, Visa's contactless payment technology, Visa Canada said.

Visa plans to test payWave credit cards, but not payWave debit cards, at the 2010 Vancouver Winter Olympics and Paralympic Games that begin Feb. 12.

MasterCard Canada said it "supports the objectives of the code and is not recommending dramatic changes to the draft," which the company said "balances the interests of the various players in the payments system, including addressing the concerns of small merchants."

Finance Minister James M. Flaherty has not set a deadline for finalizing the code of conduct.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.