On November 4th, 2014, the Honorable Joe Oliver, Minister of Finance of Canada, issued a statement regarding credit card processing fees.
Both Visa and MasterCard voluntarily submitted separate proposals to reduce the credit card fees associated with processing transactions.
The proposals were made to reduce fees to an average effective rate of 1.50% (currently around 1.59%) for the next five years. This reduction would represent an approximate 10% in credit card fees, resulting in lower costs for merchants and lower prices for consumers.
In summary, the proposals will:
- Reduce interchange costs associated particularly with non-qualifying cards
- Ensure that all merchants receive a cost reduction in the hard costs associated with processing transactions
- Provide a greater reduction for small and medium size businesses, including charities
- Require an annual review by a third party to maintain compliance to these standards
This reduction will apply automatically on your processing statements no later than April 2015. If Visa and MasterCard fail to comply to these new standards and commitments, the government will work to ensure that costs are kept low for consumers and merchants alike.
American express was not part of the credit card probe by the Competition Bureau. It is currently examining further potential changes in Debit and Credit Cards, to be announced in the near future.
For more information on this statement from the Minister of Finance please continue reading here.