This month, the Government of Canada announced that a revised Code of Conduct for the Payment Card Industry in Canada will take effect on October 30, protecting over one million businesses that accept customers’ credit card and debit card payments.
The revised Code will help businesses compare prices and offers from different payment processors and shorten the complaint handling response time by nearly 80 percent to just 20 business days. All major payment card network operators in Canada have agreed to the terms of the revised Code. Certain obligations requiring complex or technical system changes will come into effect by April 30, 2025.
The federal government also announced that new, reduced credit card transaction fees for small businesses will take effect on October 19, 2024. More than 90 percent of small- and medium-sized businesses that accept credit cards will receive lower rates and see interchange fees reduced by up to 27 percent. These fee reductions are expected to save eligible small businesses about $1 billion over five years.
The federal government expects all members of the credit card industry, including payment processors, to pass these savings on directly to small businesses. The federal government negotiated and finalized new agreements with Visa and Mastercard, protecting reward points offered to Canadian consumers. Reduced credit card transaction fees will save small businesses thousands of dollars annually.
For example, if a store processes $300,000 in credit card payments, they currently pay nearly $4,000 annual fees. The store could save $1,080 in fees annually with these new agreements.
The government is taking action to help businesses start up, grow, and thrive by reducing business costs. These supports for business owners build on the tax cut for small businesses announced in Budget 2022, saving businesses $660 million in taxes over 2022-23 to 2026- 27, by making the 9 percent federal small business tax rate available to more businesses as they grow. If you have any questions or concerns, please do not hesitate to reach out to our office.
