Canada to Cut Credit Card Fees for Small Businesses

Starting October 19, Canada will reduce credit card transaction fees for small businesses by up to 27%, potentially saving them over C$1 billion ($740,000 USD) over five years. Finance Minister Chrystia Freeland announced the move, which is part of an agreement between Visa, Mastercard, and Canadian regulators.

The fee cuts apply to businesses with less than $240,000 in yearly Visa sales or $129,000 with Mastercard, reducing in-store fees to an average of 0.95% and cutting online fees by 10 basis points. This could save qualifying businesses around $600,000 over the next five years.

Although small businesses represent a minor portion of Visa and Mastercard’s global transactions, the fee reduction comes amid growing international pressure on payment companies to lower fees. Visa and Mastercard have yet to comment on the changes.

This initiative reflects broader efforts to make payments more affordable, while encouraging small businesses to explore alternatives like digital wallets and direct transfers.