Finance Minister Jim Flaherty said Friday that the voluntary code of conduct will be in place within a month.

The code is aimed at reducing the cost of card transactions for businesses, which pay a fee to credit and debit companies each time a consumer swipes a card.

The Canadian Federation of Independent Business welcomed the announcement, calling it an "important step" as the summer business season nears.

"These developments will create a better future for merchants and help ensure a fair and transparent credit and debit card market instead of just letting large industry players call all the shots," Catherine Swift, president of the group said in a release.

The Payments Accountability Council, led by Retail Council of Canada and the Canadian Council of Grocery Distributors and backed by more than 250,000 Canadian merchants, called the announcement "a solid victory for merchants across the country."

Flaherty, during an event at Toronto's Eaton Centre, said the industry has until May 17 to review and adopt the measures.

The code will give merchants the freedom to choose which card networks they use, helping them control costs and pass those savings on to customers, he said.

Flaherty proposed the code last fall after taking heat from retailers over the processing fees charged to them by credit card companies to carry their services.

The code, among other things, implements rules to ensure merchants receive a minimum of 90 days notice of any fee increases. Store owners will be allowed to cancel their contracts without penalty following notification of a fee increase.

It also states that merchants must agree in writing to accept new products or services, meaning there will be no so-called negative option acceptance.

The Retail Council of Canada has estimated credit-card fees cost merchants about $4.5 billion a year. Critics say such charges wind up in the cost of goods and services sold to consumers.

The NDP critic for consumer protection said there's no teeth to Flaherty's proposal because it's voluntary.

"The intention is there, but it's disappointing that it's not mandatory," said New Democrat MP Glenn Thibeault.

Thibeault said he would like to see legislation in order to protect small businesses and consumers. He would like to also see more on the consumer side.

"There's nothing here to talk about the exorbitant interest fees, charges and hidden fees that consumers have to pay to these credit card companies," said Thibeault.

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