Big news for small business: details of first-ever credit card fee reduction
In November 2014, Visa and MasterCard announced the first-ever reduction in the interchange fees to accept credit cards, and a freeze of those rates for an additional five years. The lower fees were implemented in April 2015.
The rates listed below are for electronic, in-person transactions for the majority of small and medium-sized merchants. Both Visa and MasterCard have announced general rate reductions, with MasterCard also announcing a lower rate category for independent businesses in several sectors.
|VISA (electronic, in-person chip or swiped transactions)||Before April 2015||After April 2015||Savings|
|Regular (Classic, Gold, Platinum)||1.54||1.42||7.8%|
More details on the new rates are available on Visa’s website.
|MasterCard (electronic, in-person chip or swiped transactions)||Before April 2015||After April 2015||Savings|
As noted above, MasterCard has set up an independent business rate category for firms in 24 business sectors (including taxis, hardware stores, lawn/garden supplies, variety stores, bakeries, misc food stores, alterations/tailors, eating places, restaurants, drug stores, book stores, news dealers, pet shops, drycleaners, barber/beauty shops, shoe repair/shine, car washes) who will qualify for even lower rates.
|MasterCard (independent business rate)||Before April 2015||After April 2015||Savings |
More details on the new rates are available on MasterCard’s website.
For small businesses in Canada, this announcement should put an end to the regular fee hikes and ever-higher levels of premium cards which have become the norm in recent years. Consumers should also breathe a sigh of relief, as these fees are inevitably built into the price of everything they buy, to the tune of $5-7 billion a year.
CFIB and our members played a key part in this announcement. We've spent years lobbying the federal government, the credit card companies and the banks to address this significant input cost. This happened due to the support of our 109,000 members – all small business owners - from coast to coast.
CFIB will continue to be vigilant to ensure that the savings introduced by VISA and MasterCard will be passed on to small businesses. We will also continue to push for more fairness in the payments industry.