The federal government says it has finalized deals with credit card giants Mastercard and Visa to lower transaction fees in a move designed to help Canadian small businesses.
Under the deal, interchange fees businesses pay to credit card companies will be cut by up to 27 per cent, while also agreeing to provide free access to fraud and cybersecurity services.
The changes apply to small businesses and non-profit organizations with less than $300,000 in Visa sales and less than $175,000 in Mastercard sales.
The government said the change will help 90 per cent of credit card-accepting businesses save a total of $1 billion over the next five years.
“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,” Small Business Minister Rechie Valdez said in a news release on Tuesday.
“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.”
The deal, which comes into effect in the fall of 2024, was first announced in May.
The Canadian Federation of Independent Business said the announcement brings “some welcome relief to small businesses,” but pushed the federal government to makes similar arrangements with other credit card companies and for further help when it comes to pandemic loan repayment deadlines.
In May, the Canadian Federation of Independent Grocers called the deal a “broken promise” because independent grocers did not fit the sales requirements.
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