Canada’s Small Businesses to Benefit from Credit Card Interchange Fees reduction!

Savings are on the way for many Merchants as Credit Card Interchange Fees relief is coming in effect, bringing in happier business owners. 

In a move that will surely bring a smile to many small and medium business owners’ faces. The Canadian Federal Government have recently reached a deal with both Visa and Mastercard to lower interchange fees while ensuring the protection of reward points for their customers.

Starting October 19, 2024, qualifying small businesses in Canada will see a drastic reduction of Domestic Consumer Credit Interchange Fees for both in-store and online credit card transactions. Fees for in-store transactions will drop to an annual weighted average interchange rate of 0.95 per cent, and fees for online transactions will decrease by 10 basis points or up to 7 per cent. On average, small businesses could save around $350 per year for every $100,000 in VISA sales and $200 per year for every $100,000 in Mastercard sales. To be eligible for the fees reduction, yearly business sales volume cannot reach over $300,000 on VISA sales and $175,000 for Mastercard sales.

Visa and Mastercard will provide free access for merchants to help protect them from online fraud and education on preventing chargebacks. 

In addition, VISA and Mastercard have agreed to provide free access to resources to help combat online fraud and boost cyber security for small business. These resources are aimed to help small businesses increase their online sales while limiting fraud and potential chargebacks.

Over the upcoming 5 years, these agreements will benefit over 90% of small businesses accepting credit cards, saving them about $1 billion during this period. These savings mean more opportunities for small businesses to grow, invest, and continuing to make economic impacts in our communities.