With the long-awaited reductions in credit card fees for smaller merchants only a few months away, the Canadian Federation of Independent Business (CFIB) sent a letter to acquirers, asking if they’re ready to pass on credit card fee savings to small businesses as of October 19, 2024.
Out of 11 payment processors, five acknowledged the letter, with four of them working on a response. CFIB will publish responses from acquirers on its website and share information with members upon request.
“In the two previous rounds of interchange reductions, we’ve heard from some members that fee reductions weren’t always properly passed on to merchants. By sending this letter, we want to ensure that all major players are willing and ready to implement the cost savings, so smaller merchants can benefit from them as soon as reductions come into force,” said Corinne Pohlmann, Executive Vice-President of Advocacy at CFIB.
As of October 19, 2024, small businesses with up to $300,000 in annual Visa sales and up to $175,000 in annual Mastercard sales will qualify for a 0.95% average interchange rate for in-store sales and a 0.1% cut in ecommerce fees. This will provide fee reductions of up to 27% for the majority of small businesses.
“These are important changes that we’ve long been fighting for, and we want our members to be fully informed. It’s imperative that acquirers be transparent and prepared to implement these changes ahead of time, given that many of our members are their clients,” Pohlmann added.
In spring 2023, CFIB welcomed the new agreement between the federal government, Visa and Mastercard to lower credit card processing fees for smaller merchants. CFIB continues to put pressure on the government to expand the agreement to additional credit card providers and to review size thresholds to benefit more small- and medium-sized businesses.
CFIB’s savings partnership with Chase Merchant Services helps to guarantee that all savings from the reductions will be passed on to Chase merchants as of October 19. For more on CFIB’s work to reduce credit card fees for small businesses, visit cfib.ca/credit-cards.