by Morinville Online Staff
Small businesses are set to gain significant advantages with the forthcoming reductions in credit card processing fees, according to the Canadian Federation of Independent Business (CFIB).
Deputy Prime Minister Chrystia Freeland revealed details of the federal government’s agreement with Visa and Mastercard to lower credit card fees during an announcement held at a CFIB member bookstore in Brampton, Ontario. CFIB President Dan Kelly and several small business owners were in attendance.
Kelly emphasized the importance of the agreement, stating, “This is a significant agreement as many Canadian small business owners will now have access to a special, lower interchange rate designed specifically for them.”
Under the new terms, small businesses with up to $300,000 in annual Visa sales and $175,000 in annual Mastercard sales will qualify for an average interchange rate of 0.95% for in-store sales and a 0.1% reduction in e-commerce fees. CFIB’s initial analysis indicates that nearly three-quarters (73%) of its members will benefit from these rate reductions, which could reach up to 27%.
Expressing gratitude, Kelly added, “CFIB thanks Deputy Prime Minister Freeland and the Presidents of Visa and Mastercard for this significant accomplishment in support of Canada’s small business community. Reducing fees for small businesses in processing online transactions and providing additional help with online fraud will be of particular help in encouraging more small firms to go digital.”
As a long-standing advocate for small businesses in Canada’s payments industry, CFIB says it will ensure that the full savings from this agreement are passed on to small business owners without being absorbed by card processors offering blended rates. Additionally, CFIB says it will urge the government to fulfill its commitment to extending these measures to other card brands, including American Express. CFIB will call for a faster implementation than the current target of fall 2024, as well as a regular review of the size thresholds to ensure that more small businesses can benefit from these reduced rates in the future.