The code of conduct is only two years old, but did not make allowances for the fact that technology would soon allow Canadians to make credit and debit payments not with cards but on mobile devices.
Ted Menzies, the Minister of State for Finance, said Tuesday the government would conduct a public consultation process in the next 60 days to consider how the code can be amended to reflect the new reality.
"Once we have reviewed and evaluated all submissions, we will set about revising the code so that Canadians and small businesses can use mobile payment offerings," he said.
Menzies said the new rules would ensure both customers and merchants have flexibility in payment options.
The Canadian Federation of Independent Business welcomed the announcement.
The group says it will help make the code of conduct even more relevant and useful to small business owners.
Canadians can submit views and suggestions to the government online at firstname.lastname@example.org.
Research released earlier this year by Google suggested Canadians are lukewarm on the idea of using their phones to make online purchases. After speaking with 1,000 Canadian smartphone users, only 20 per cent said they had made a mobile purchase and only 16 per cent said they expected to boost their mobile shopping in the following year.
Meanwhile, a MasterCard research project called the Mobile Payments Readiness Index ranked Canada as the second-best of 34 global markets in terms of being set to embrace mobile transactions (Singapore ranked first).
But while Canada ranked high for its partnerships between banks and governments, and its business and regulatory environments, it was below average when it came to the consumer readiness metric.
Mastercard estimated only about 15 per cent of Canadian consumers were willing to use a mobile phone to pay in stores, which was two percentage points below the global average.
On Monday, Rogers Communications Inc. said it expects to launch a credit card that will be part of a "virtual wallet'' as the telecom company moves to mobile payments on smartphones.
Chief executive Nadir Mohamed predicted that in five years it will be common to use a smartphone as a digital wallet to store credit cards and identification.
Rogers (TSX:RCI.B) and CIBC (TSX:CM) already have announced they will launch Canada's first mobile payments system later this year, giving Canadians the ability to pay with their credit card using a smartphone.
Newer BlackBerry smartphones have the ability to make mobile payments as well as some using Google's Android operating system. The new iPhone 5, however does not have Near Field Communication short-range wireless technology to link to credit card information.