Big credit card firms to cut fees they charge merchants: CP source

Andy Blatchford, The Canadian Press</span>
Published Thursday, August 9, 2018 12:48PM EDT

OTTAWA - The federal government is announcing today that major credit card companies have agreed to lower the fees they charge the country's businesses.

A government source tells The Canadian Press that Ottawa has reached voluntary, five-year deals with Visa, Mastercard and American Express that the feds expect will help small and medium-sized companies save a total of $250 million per year.

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.

The changes, which are also expected to help consumers, are being unveiled at an Ottawa grocery store later today by Finance Minister Bill Morneau and Mary Ng, the new minister for small business and export promotion.

The source, speaking on condition of anonymity to discuss matters not yet public, says the reductions could help smaller businesses save thousands of dollars over the five-year period -- and the government is hoping the extra funds will encourage owners to invest, expand and create jobs.

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