Visa and MasterCard have announced that they will be lowering their interchange fees to less than 1% in Canada. This move is expected to benefit both merchants and consumers, as it will reduce the cost of credit card transactions.
The National Crowdfunding & Fintech Association of Canada (NCFA) has provided details on this development, stating that the new interchange fee will be 0.98% for Visa and 0.99% for MasterCard. This is a significant reduction from the current interchange fee of 1.42% for Visa and 1.47% for MasterCard.
Interchange fees are the fees that credit card companies charge merchants for processing credit card transactions. These fees are typically passed on to consumers in the form of higher prices for goods and services. By lowering these fees, Visa and MasterCard are helping to reduce the cost of doing business for merchants, which could lead to lower prices for consumers.
The NCFA has praised this move by Visa and MasterCard, stating that it will help to promote competition in the credit card industry and encourage innovation in payment technology. The association has also called on other credit card companies to follow suit and lower their interchange fees.
This development comes after years of pressure from merchants and consumer advocacy groups to reduce interchange fees. In 2018, the Canadian government introduced regulations that capped interchange fees at 1.5% for Visa and MasterCard, but this new announcement goes even further.
It is important to note that this reduction in interchange fees only applies to credit card transactions. Debit card transactions will not be affected by this change.
Overall, this is a positive development for both merchants and consumers in Canada. Lower interchange fees will help to reduce the cost of doing business for merchants, which could lead to lower prices for consumers. It will also promote competition in the credit card industry and encourage innovation in payment technology.
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- Source: https://zephyrnet.com/visa-and-mastercard-set-to-decrease-average-interchange-fee-to-under-1-in-canada-national-crowdfunding-fintech-association-of-canada/
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