Visa And Mastercard Have A New Interchange Fee For Small Businesses

If there’s one thing businesses can agree on, it’s that they pay too much for credit card fees.

Last fall, they finally got the ability to directly pass these costs on to customers, even if we all know these costs are included in their prices.

There’s a new agreement now for small businesses with Visa and Mastercard to pay lower fees.

A lower interchange fee for small businesses

Depending on the volume of transactions done with Mastercard and Visa, small businesses will be able to qualify for a lower interchange rate. This is part of a 2023 federal government budget commitment to lowering credit card fees.

Currently, the average fee paid is 1.4%. For small businesses, that will be lowered to an average 0.95%. It is still an average – some cards will incur higher fees than others.

These fees also don’t apply immediately, they’ll take effect sometime in the fall of 2024.

To qualify, here’s what small businesses will need to do, which varies by network. There’s a maximum sales volume for each network to meet.

• Visa – $300,000
• Mastercard – $175,000

If you do above these amounts for each network, you won’t qualify for the lower rate.

Be sure to read the full release from the government if you’re interested in more details on the lower credit card transaction fees for small businesses.

What does it mean for consumers?

What does it all mean really? It’s hard to say what impact this will have. One point to note in the government’s release is that Canada’s large banks have agreed to protect reward points.

Merchants generally haven’t been adding surcharges to bills when people go to pay with a credit card, so it’s not likely to have any impact on this either.

Time will tell if this has an impact on credit cards and pricing in Canada.

Your thoughts on Visa and Mastercard’s new rates

With these new rates coming, what are your thoughts on them?

Do you think much will change with credit cards?

Let us know in the comments below.