QUESTION PERIOD — Innovation, Science and Economic Development
Credit Card Fees for Small Businesses
December 11, 2023
My question is for the Government Representative in the Senate. In Budget 2023, the government committed to working with Visa and Mastercard to lower credit card interchange fees for small businesses on what we commonly refer to as swipe fees. Last week, Minister Valdez confirmed that a deal was made and explained that small business owners will be able to save $1 billion over the next five years because of this agreement. The Canadian Federation of Independent Business has been pushing for this measure for over a decade, but feels the agreement does not go far enough.
Senator Gold, small businesses need relief now, so why are these changes being delayed until the fall of 2024? Furthermore, how many businesses will be eligible for these changes, and what is the business size threshold to qualify?
Thank you for your question and for underlining this important initiative. Small businesses will qualify with each credit card network individually. Specifically, small businesses with an annual Visa sales volume below $300,000 will qualify for lower interchange fees from Visa, and those with annual Mastercard sales volume below $175,000 will qualify for the lower fees from Mastercard. My understanding, senator, is that over 90% of all credit card-accepting small businesses in Canada will benefit from reduced credit card fees of up to 27%, and that will help them save up to $1 billion over five years.
Thank you for the answer.
The agreement the government has reached with Visa and Mastercard also includes free access to online fraud and cybersecurity resources, as many businesses have been increasing their presence online, and they may not all have the necessary capital, technology and expertise to address major cyber breaches. Can you share some of the details of this portion of the agreement? What have Visa and Mastercard agreed to in terms of fraud protection? Is there a limit to their support?
I understand that Visa and Mastercard will be providing small businesses that qualify with free access to online fraud and cybersecurity resources, and that’s in addition to existing supports such as the Canada Digital Adoption Program, which helps such enterprises boost their e-commerce presence and digitize how they run their businesses behind the scenes.
