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Insider’sreport

on payments

Card brands agree

to lower interchange

for some in Canada

By Patti Murphy
Pro Scribes inc.

he Canadian government disclosed a "nego-
tiated" agreement with Visa and Mastercard
to lower credit card interchange fees paid by
T about 90 percent of small businesses north of
the border. Not surprisingly, some U.S. merchants see
this as an opportunity to press for price controls here
as well.

"If Visa and Mastercard can afford to reduce their swipe
fees in Canada, there's no reason they can't do the same
here," said Doug Kantor, general counsel at the National
Association of Convenience Stores. “It doesn’t make
sense that the country that invented the credit card and
is home to the two largest credit card companies on the
planet has the highest swipe fees in the industrialized
world.”
The Canadian Department of Finance revealed on May
18, 2023, that it had finalized a deal with Mastercard
and Visa to slash credit card interchange by up to 27
percent from the existing weighted average for up
to 90 percent of small businesses in the country. The
reductions, effective in the fall of 2024, are expected to
save eligible small businesses about $1 billion over five
years, the Finance Department stated.

The two card companies have agreed to lower
domestic consumer credit card interchange for in-
store transactions from 1.4 percent to 0.95 percent, the
Canadian government said in a statement. Interchange
on domestic consumer online transactions will be
reduced by 10 basis points, resulting in savings of up
to 7 percent.

Additionally, Visa and Mastercard agreed to provide
merchants in Canada with free access to online fraud
and cyber security resources as a way of helping small
businesses grow online sales while preventing fraud
and chargebacks.
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