The Right Merchant Account Makes a Major Difference for Smaller Businesses

Can Canadian Businesses Keep Consumers' Credit Card Data Indefinitely?

For good reason, many might ponder whether it is legal for Canadian commercial concerns to retain details of customers' credit cards.  The correct answer to this query is a resounding "yes."  Unlike many other jurisdictions, federal law in Canada permit establishments that utilize merchant services to keep consumers' individual credit card data on file for up to six years after a transaction.

There are, however, certain applicable restrictions on this rule. When maintaining such records in an electronic format via a merchant account, businesses must implement various safeguards for such sensitive information.  Online and conventional "stick-and-brick" establishments are both held to these rigorous security standards.  If you are a small entrepreneur, there are many firms that offer credit card-related legal compliance services for holds of merchant accounts.

Paperless Documentation

Every business that accepts credit card payments via computer must maintain, retain, and secure customers' credit card details.  Firms utilizing any computerized platform to process  payments must strictly adhere to various consumer financial privacy regulations.  Also, accurate computation of taxation and other business-related benefits and obligations rely upon scrupulous adherence to such standards. 

Retaining Consumer Credit Data

Many reasons exist for Canadian businesses to keep purchasers' credit card data on file for a few years:

-   Canadian businesses are legally required by the Revenue Canada to retain such information for up to seven (7) years;

-   Online purchases nearly always entail credit card use for transaction consummation.  Businesses are legally-bound to ensure that such sensitive data remains secure at all stages of its transmission, by appropriate encryption technologies;

-  If a purchaser should demand a refund, full documentation of the transaction is required for its prompt processing. The final four numerals displayed on the credit card face demonstrates the absence of any fraudulent attempt to obtain cash or its equivalent.

-   Quite often, consumers instigate refund requests many months after buying merchandise.  In such instances, proper record retention facilitates ease of access needed for a full investigation as to the underlying cause of the request.

-  If an online merchant maintain some form of automated renewal process such as is common for subscription-based service providers, prior capture of the credit card data is necessary to complete subsequent charges via the online payment processing system.

-  If a credit card purchase is ever cancelled, the ability to quickly retrieve customer credit card data permits  prompt charge reversal and refund processing.

Consumer Privacy

Sales persons and other business representatives remain under an affirmative duty to duly ascertain the accuracy of credit information. Such information should never be repeated aloud from stored database sources, however.  Individual credit card information that is written or conveyed telephonically should reference only the final four digits of the account number.  The consumer is then requested to verify this sequence, along with other personal identifiers.

Merchant Account Services for Small Canadian Businesses

Owners of smaller firms should be able to benefit substantially from retaining a reliable merchant account service provider.  If you operate a small business in Canada and want to accept credit card payments to facilitate increased sales of the services or products you offer, find a merchant accounts servicer  with an established reputation that you have rapport with.  Choosing the proper merchant services vendor from here carries a major impact on your long-term business success by reducing the headaches and hassles of alternative payment processing and record keeping methods.