Canada:Major credit card companies have struck an agreement with the federal government to trim the fees they charge to merchants in a move Ottawa hopes will provide a boost to small businesses.
Ottawa announced Thursday it has reached voluntary, five-year deals with Visa, MasterCard and American Express by about 10 basis points.
Finance Minister Bill Morneau, who unveiled the deal at an Ottawa grocery store, said he expects the agreements to help small and medium-sized businesses save a total of $250 million per year.
“That’s a big difference for companies,” said Morneau, who billed the change as part of his department’s effort to listen to the concerns of Canadian business owners about staying competitive.
“Today, is one part of responding to those competitiveness challenges.”
Starting in 2020, Visa and MasterCard will reduce the fees they collect from businesses to an average annual effective rate of 1.4 per cent – down from 1.5 per cent – and narrow the gap between the highest and lowest rates they charge retailers. American Express has agreed to provide more fairness and transparency as part of a separate voluntary commitment that recognizes its unique business model. But some had hoped Ottawa would lower the rate even further.
