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.

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.

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.

“Small- and medium-sized businesses are the backbone of our economy, and today, we are once again delivering real, tangible support to help them thrive. We are making it cost less for businesses to start up, grow, and thrive, so they can help our main streets flourish," The Honourable Filomena Tassi, Minister responsible for the Federal Economic Development Agency for Southern Ontario said.

"By reducing the cost of accepting credit and debit payments, eligible small businesses can expect to save about $1 billion over five years, allowing entrepreneurs to put more of their money towards growing their business.” ■