2023-05-19 02:57:19
Ottawa has reached an agreement with Visa and Mastercard to allow small businesses to pay less fees during transactions. A “great victory for SMEs”, according to the Canadian Federation of Independent Business (CFIB).
Under this new agreement announced Thursday, smaller businesses will be able to benefit from a weighted average annual interchange fee of 0.95% for in-store transactions.
Interchange fees are paid by companies to financial institutions that issue credit cards. “The new commitments from Visa and Mastercard will make credit card transactions fairer for small businesses, which don’t have the same bargaining power as larger businesses when it comes to negotiating lower rates” , explained the Deputy Prime Minister and Minister of Finance of Canada Chrystia Freeland in a press release.
PHOTO SPENCER COLBY, THE CANADIAN PRESS
Federal Finance Minister Chrystia Freeland
The rewards Canadians receive for using their credit cards will not be affected by these changes, Ottawa said.
Eligible companies must have an annual sales volume of less than $300,000 for Visa, and $175,000 for Mastercard. Qualified non-profit organizations will also be able to obtain the same benefits.
According to the federal government, 90% of Canadian businesses will be eligible for this reduction in their interchange fees, which can reach 27%.
Canadian small businesses might save regarding $1 billion over five years, according to the federal government.
The government will also provide support for protection once morest fraud and cyberattacks related to e-commerce.
“With lower interchange fees, small businesses will be able to save money that they can use to grow and create more good jobs,” said Mr.me Freeland at the announcement Thursday in Brampton, Ont.
An important agreement, according to the CFIB
The Canadian Federation of Independent Business (CFIB) hailed a “significant victory” for small and medium-sized businesses across the country. CFIB represents 97,000 members across Canada.
“CFIB’s initial analysis shows that nearly three-quarters (73%) of its members will benefit from this measure, which represents a rate reduction of up to 27%,” the Federation said in a statement in response to the announcement. ‘announcement.
“The reduction in online credit card transaction fees and additional help in the event of internet fraud will encourage more small businesses to start selling online,” said François Vincent, vice-president in Quebec. for CFIB.
The main flaw of the agreement announced Thursday is that it will not come into force before the fall of 2024, however lamented the Federation.
The latter will therefore ask that the changes be implemented more quickly and that the only ones relating to annual sales be reviewed on a regular basis “so that a greater number of SMEs can benefit from the reduced rates in the future”, perhaps -we read.
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