OTTAWA, Oct. 17 (Xinhua) -- The Canadian federal government announced Thursday that new credit card fee reductions for small business owners will come into effect this Saturday.
More than 90 percent of Canadian businesses that accept credit cards will receive lower rates and see interchange fees reduced by up to 27 percent, the Federal Economic Development Agency for Southern Ontario said in a press release.
These fee reductions, which the federal government negotiated with Visa and Mastercard, will save eligible small businesses about 1 billion Canadian dollars (720 million U.S. dollars) over five years, the release said.
Visa and Mastercard have agreed to reduce domestic consumer credit interchange fees for in-store transactions to an annual weighted average interchange rate of 0.95 percent; and reduce domestic consumer credit interchange fees for online transactions by 10 basis points, resulting in reductions of up to 7 percent, the release said.
According to the release, small businesses with annual Visa sales volume below 300,000 Canadian dollars (217,000 U.S. dollars) will qualify for the lower interchange fees from Visa, and those with annual Mastercard sales volume below 175,000 Canadian dollars (127,000 U.S. dollars) will qualify for the lower fees from Mastercard.
The government is taking action to help small businesses start up, grow, and thrive by reducing the costs of running a business. These reduced credit card fees for small business owners build on the government's lowering of the small business tax rate to 9 percent, the release said. ■