Lower Credit Card Processing Fees Save Canadians Money

Credit card processing fees for small and medium-sized businesses are beginning to ease after the federal government reached an agreement with the two major card networks. The settlement reduces interchange fees — the fees card networks charge merchants for each transaction — and is expected by Ottawa to save Canadian businesses roughly $1 billion over five years.

Under the deal, Mastercard and Visa will lower certain interchange rates by as much as 27 percent. For many small merchants, the change will mean lower costs on card-acceptance, which can improve margins for businesses that rely heavily on card payments.

Arber Gjoci, who runs Lili’s Grill in Toronto, welcomed the adjustments. His family opened the restaurant nearly a year ago and has felt pressure from a variety of operating costs, including card fees. “Hopefully we can save a little bit — every bit helps,” he said, adding he expects to see the impact reflected in the next quarter’s numbers.

Gjoci said his family’s prior restaurant operated largely as a cash business with an on-site ATM, but they started accepting cards at the new location after seeing customers leave when cards weren’t accepted. “We have no other option,” he said. “We don’t want payment options to limit how many customers we can bring in.”

Featured credit cards

Below are examples of credit cards commonly promoted to Canadian consumers. These examples illustrate the diversity of card offerings — from reward-focused products to low-APR options — and are provided for context rather than endorsement. Always review terms, annual fees and interest rates before applying.

Tangerine Rewards World Elite Mastercard — A rewards card with an annual fee, welcome points and travel-related credits often offered in the first year.
SimplyCash Preferred Card from American Express — A cash-back card typically marketed with elevated cashback categories such as groceries and gas.
MBNA True Line Mastercard — A low-APR option aimed at cardholders focused on managing existing balances with a lower purchase rate than typical credit cards.

How much merchants can save and who qualifies

Industry groups and the government have provided estimates on savings for qualifying merchants. The Canadian Federation of Independent Business (CFIB) said qualifying businesses could expect roughly $350 in annual savings for every $100,000 processed in Visa sales, and roughly $200 in savings for every $100,000 processed in Mastercard sales.

Eligibility is limited by sales volume: the reductions apply to merchants whose Visa sales do not exceed $300,000 and whose Mastercard sales do not exceed $175,000. The fee changes take effect officially on Saturday, though several payment processors began adjusting rates for qualifying customers in advance.

Payment processors’ response and transparency concerns

While some processors have said they will pass the savings on to eligible merchants under both interchange-plus and flat-rate pricing models, not all providers have been equally transparent. The CFIB criticized some companies for not clearly explaining whether and how savings will be passed through to small-business customers.

For example, Stripe announced that merchants on its Interchange Plus pricing — where costs vary by transaction type — will see the reduced interchange fees reflected in their charges. However, Stripe has stated that its flat-rate plans will not change because, according to the company, other operating costs and fees have risen and offset the interchange reductions.

By contrast, other processors such as Moneris have said qualifying businesses will see reductions under both their interchange-plus and flat-rate models. The differing approaches have raised questions about how uniformly the savings will reach the smallest merchants.

Government expectations and merchant protections

A Finance Ministry spokesperson, Marie-France Faucher, said the fee reduction should benefit about 90 percent of businesses that accept credit cards and emphasized that the government expects payment processors to pass the savings to small merchants. The ministry said it is monitoring the implementation closely and that the revised industry code of conduct gives merchants additional rights, including the right to switch processors without penalty.

The updated code and monitoring aim to improve transparency and competition in the payments ecosystem, helping merchants understand the costs they pay and enabling them to change providers more easily if better pricing is available.

What small businesses should consider

Review your merchant statements: Compare current rates and fees to future statements to confirm any reductions have been applied.
Understand your pricing model: Interchange-plus pricing passes network fees through to merchants, while flat-rate plans bundle fees into a single rate; savings may be treated differently under each model.
Ask your provider for clarification: Request a written explanation of how and when fee reductions will be implemented for your account.
Know your rights: The revised industry code seeks to protect merchants, including making it easier to change processors without penalties. Confirm any contractual termination clauses before switching.