Visa is lowering credit card processing fees for tens of thousands of Canadian small businesses starting October 24. But before merchants celebrate, both Visa and Mastercard have some new fees coming that could eat into those savings.
The Canadian Federation of Independent Business (CFIB) announced the changes on October 14, saying more businesses will qualify for Visa’s discounted rates.
Every time someone pays with a credit card, the business pays a processing fee. Part of that goes to the bank that issued the card and is known as an interchange fee. For businesses handling hundreds or thousands of transactions, those fees add up.
Starting October 24, Visa is raising the annual sales limit for its lower small-business rates from $300,000 to $750,000 CAD. Businesses already getting the discount will also see their rates drop. Mastercard, on the other hand, is sticking with its $175,000 CAD threshold.
“This is a big win for many small businesses that will now qualify for Visa’s special, lower interchange rate,” said CFIB president Dan Kelly. “The additional businesses that now qualify for the small merchant program will save thousands each year.”
There’s some bad news, though. Visa and Mastercard are introducing a new charge of 1.8 cents USD per domestic transaction. Mastercard is expanding the fee to all transactions this week, while Visa plans to add it in April 2027. The charges go to payment processors first, but businesses could end up footing the bill.
The changes follow a 2024 agreement with Ottawa to reduce credit card fees for small businesses. Canada has been dealing with this issue for years. Back in 2022, Telus tried adding a credit card payment fee to customer bills, but the CRTC later blocked the surcharge for certain services.
Ottawa has also introduced rules around card fees through Canada’s code of conduct for credit and debit card payments, which was expanded to include mobile payments.
So while Visa’s lower rates should save small businesses some money, the new charges from both card companies could take some of that back. How much merchants actually save will depend on what their payment processors pass along.
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