Credit card processing fees for small firms to drop in 2020; Government promises to end swipe fees on GST/HST

Visa and Mastercard rate reductions scheduled for April 18th and May 1st respectively, are delayed due to COVID-19. The new implementation dates will be July 17th for Visa and August 1st for Mastercard. The new Interac rate came into effect April 1st. 

Toronto, November 7, 2019 –Some of the fees merchants pay on credit card transactions will go down from 1.5 per cent to 1.4 per cent on average starting in April 2020 as a result of an agreement reached by the federal government with Visa and Mastercard last year. The Canadian Federation of Independent Business (CFIB) is pleased by this latest victory for small business but warns independent merchants to protect themselves from misinformation and unfair contracts.

“CFIB has been battling for fairness for over a decade and we are pleased to see that the federal government and the big credit card companies are listening,” said CFIB president Dan Kelly. “We have come a long way from the years where fees were rising by 20 to 40 per cent as a result of new tiers of premium credit cards.”

New government promises to end fees on sales taxes
In addition, small merchants will be pleased to hear that the Prime Minister has promised to eliminate processing fees on HST and GST for credit card transactions, a move estimated to save merchants nearly $500 million per year in fees. 

“We were thrilled to have our long-standing recommendation adopted as part of the Liberal Party platform,” Kelly noted. “It is deeply unfair that merchants must eat the cost of fees related to collecting and remitting sales taxes to government.”  

CFIB stands ready to work with government to develop ways to quickly implement this idea.

Caution to merchants
While these announcements are very good news, CFIB warns small business owners to be vigilant to ensure the savings are passed along to them. 

“In dealing with payment card processors, almost a third of small merchants report harassing phone calls, 18 per cent have experienced misrepresentation and 16 per cent said they’ve experienced deceptive sales practices,” Kelly said. “There are several good processors who work hard to serve small businesses, but many small businesses have fallen victim to terrible sales practices, including abusive use of exit penalties in contracts offered by some processors.”

Not all fee changes are good news
In addition to the expected fee decreases, CFIB has started to receive complaints about new credit card processing fees. In particular, Mastercard is introducing a new fee on returns/refunds and preauthorizations. And while interchange rates for in-store Mastercard transactions are expected to see a meaningful reduction (up to 29 per cent), e-commerce businesses may see increases in the fees they have to pay for some categories of cards.

“We are analyzing the full suite of changes and will continue to work with the major credit card brands, governments and the payments industry to ensure that small firms are treated fairly,” concluded Kelly. 

Merchants choosing a new payment processor can review CFIB’s tips on how to avoid unfair contracts.

For media enquiries or interviews, please contact:
Milena Stanoeva, CFIB

About CFIB
The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small and medium-sized businesses with 110,000 members across every industry and region. CFIB is dedicated to increasing business owners’ chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. Learn more at