A deal between Visa and Mastercard has been finalized in Canada to reduce credit card interchange costs for small companies.
Small companies and nonprofits that sell less than $300,000 worth of Visa cards and less than $175,000 worth of Mastercard cards will be eligible for fee reductions of up to 27% starting in the fall of next year.
According to government estimates, qualifying Canadian small businesses may save around $1 billion over the course of five years by reducing in-store transactions to an annual weighted average interchange charge of 0.95%.
Furthermore, as part of the agreement, Visa and Mastercard will offer free access to resources on cybersecurity and online fraud.
“Reducing costs on small businesses will enable them to further invest in their business and its growth, while helping support their success now and into the future,” says Rechie Valdez, minister for small business.
Although the agreement “brings some welcome relief,” the Canadian Federation of Independent Business has advocated for the addition of more credit card companies and an increase in the standards.
