Government Of Canada Announces Finalized Agreements With Visa And Mastercard To Lower Credit Card Transaction Fees For Small Businesses
December 5, 2023
|Ottawa, Ontario – The Government of Canada today announced it has finalized agreements with Visa and Mastercard to lower credit card transaction fees for small businesses. The agreements also protect reward points offered to Canadian consumers by Canada’s large banks.
Small businesses pay fees to process credit card transactions, with the largest component being the interchange fee paid to credit card–issuing financial institutions, such as banks. These new agreements will help more than 90% of credit card–accepting businesses in Canada qualify for lower rates and see their interchange fees reduced by up to 27% from the existing weighted average rate. These reductions are expected to save eligible Canadian small businesses about $1 billion over five years.
For qualifying small businesses, Visa and Mastercard have agreed in the finalized agreements to:
Small businesses with an annual Visa sales volume below $300,000 will qualify for the lower interchange fees from Visa, and those with an annual Mastercard sales volume below $175,000 will qualify for the lower fees from Mastercard. Small businesses will need to qualify with each credit card network individually. Non-profit organizations with transaction volumes below these thresholds will also benefit from reduced rates.
As part of these new agreements with Visa and Mastercard, Canada’s large banks have agreed to protect Canadians’ reward points.
The new rates will come into effect in the fall of 2024.
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