MasterCard has teamed up with the Canadian Federation of Independent Business (CFIB) to slash interchange fees on card transactions for small- and medium-sized enterprises (SMEs) in Canada.
It is estimated that nearly 109,000 SMEs who are members of CFIB will get interchange reductions of 12.5% or more on MasterCard purchases starting 3 April 2017 as per the terms of an agreement announced by both the sides.
The revised interchange fee rates will be available to CFIB members through all Canadian merchant processors including the federation's referral partner, JPMorgan Chase & Co.’s merchant-acquiring subsidiary, Chase Paymentech.
The new rate, which will slash members’ acceptance costs on basic point-of-sale electronic transactions, will be similar to interchange rates normally given to large merchants in the top of four pricing tiers for Canadian merchants.
As per the Chase Paymentech’s Canadian Web portal, its current 1.46% MasterCard discount rate on retail consumer electronic transactions, excluding gas and grocery purchases, will be reduced to 1.28% of the sale for CFIB members. That compares with 1.44% for similar Visa transactions.
Commenting on the pact, CFIB president Dan Kelly said: “This new agreement with MasterCard is a big deal for small business.
“It gives members access to transaction rates that reflect their combined sales of more than $3bn, and lowers their cost of acceptance. This is a significant step forward in Canada’s payment industry and serves as an important sign of progress in the relationship between payment companies, like MasterCard , and smaller merchants.”