Canada has reached an agreement with Visa and Mastercard to lower credit card transaction fees for small businesses.
This comes after businesses were allowed to pass the cost of credit card fees onto the consumer in October 2022.
Now, The Government of Canada says the new agreement will see interchange fees reduced by up to 27% for small businesses. It’s expected to save businesses $1 billion over five years.
Good news: We’ve finalized agreements with VISA and Mastercard to lower credit card transaction fees for small businesses. This is expected to save eligible small businesses around $1 billion over five years. More details here: https://t.co/tOLaSmT7Jx
— Justin Trudeau (@JustinTrudeau) December 5, 2023
Small businesses with annual Visa sales volumes below $300,000 will qualify for lower rates, and so will those with annual Mastercard sales volumes below $175,000.
The changes come into effect fall 2024, when domestic credit interchange fees for in-store transactions will be reduced to an annual weighted average of 0.95%.
Consumer credit card interchange fees for online transactions will also be reduced by 10 bases points, resulting in cost reductions of up ot 7%.
The credit card companies have also agreed to provide free access to online fraud and cybersecurity resources to help small businesses grow their online sales while preventing fraud and chargebacks.
“With these new agreements in place, our government is following through on our commitment to support small businesses that are facing higher costs because of inflation and increased interest rates,” Minister of Small Business Rechie Valdez said in a news release.
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