The Government of Canada released its 2023 budget a short while ago, and part of the document committed to providing relief for small businesses by helping them save on credit card transaction fees.
On May 18, 2023, the government announced the formal agreement it has managed to draft with Visa and Mastercard to lower the aforementioned interchange fees, while also specifically vowing to protect Canadians’ credit card rewards such as Miles & Points.
Today, let’s look at the changes, what led to them occurring, and think about how they might affect your travel plans in the future.
Interchange Fees Lowered for Small Businesses
It’s always good to see a government live up to its promises, and the turnaround from the announcement of the budget to these changes has been quite rapid.
Of course, high credit card fees have been a contentious issue for years, with business interest groups such as the Canadian Federation of Independent Businesses (CFIB) making no secret of its desire to get the fees lower as soon as possible.
The new schedule of fees is available to all small businesses whose Visa transactions total $300,000 or less per year, as well as for businesses whose Mastercard transactions are less than $175,000 per year.
The new fees that small proprietors can expect to pay are a weighted average of 0.95% on in-store transactions. There has been a reduction of 10 basis points, or 0.1% of the gross transaction total (for a net savings of 7% of the total interchange fee), on online purchases.
Visa and Mastercard have also agreed to make anti-fraud and cyber-security resources available for free in order to prevent fraud and/or chargebacks (the latter being a consumer protection mechanism sadly abused by scammers).
Credit card fees were lowered by negotiations mandated by the elected government in Ottawa.
It’s important to note that the new settlement that’s been negotiated between Canada and its largest payment networks affects only Visa and Mastercard transactions. The agreement does not affect American Express, who presumably has different arrangements with merchants utilising their payment network.
Canada: A Haven for Miles & Points
What interests me about the text of the new lowered schedule of fees is that the federal government has committed in writing to “…protecting rewards points…
Click Here to Read the Full Original Article at Prince of Travel…