Visa Inc. and Mastercard Inc. have voluntarily agreed to cut the fees they charge to retailers for credit transactions, the Canadian government said on Tuesday, adding it now sees no need to regulate fees set by credit card networks.
The Canadian government said the deal, which sources last week confirmed was in the works, should result in lower prices for consumers.
This rate reduction will mean lower acceptance costs for all Visa and MasterCard accepting Canadian retailers, while maintaining benefits to consumers and merchants. The rate changes will be in effect for five years.
If clients are disadvantaged due to the decision, the companies will terminate or amend it, Visa said in a statement on Tuesday.
Canada’s small business community is hailing new commitments that could bring an end to ever-increasing credit card fees that add $5-7 billion a year to the price of goods and services.
“Today’s announcement should be a win for consumers too,” said Dan Kelly, president of the Canadian Federation of Independent Businesses (CFIB). “Merchants have been forced to embed these rising fees in the cost of everything they sell, so reducing the cost pressure should help small businesses keep prices down.”
The commitments represent an average 10 per cent reduction in interchange rates.
Original Source: Globe & Mail