TORONTO—The Canadian Federation of Independent Business is calling for a stronger code of conduct for the credit and debt card industry, including rules that give merchants more flexibility and includes provisions for new electronic forms of payment.

The association, which has more than 100,000 member businesses across Canada, says the current code gives merchants some power to deal with the card industry but argues the rules need changes to remain relevant.

The CFIB says store-keepers and others who accept credit and debit cards as payment need the right to refuse high-cost cards or add limited surcharges.

The association is among those arguing against industry rules that require businesses that accept Visa or MasterCard to treat all types of their cards equally, regardless of the cost of processing the payments.

The CFIB says the recent settlement of a U.S. legal battle between Visa, MasterCard and merchants last week was encouraging.