Credit-Card Fee Cuts Are Here – How to Capture the Savings Without Losing Customers

Canada finally moved on credit-card costs for small business. The fee cut is real. And if your processor passed it through, you should see it on statements already. If not, you can push for it. The trick is to pocket the savings without frustrating customers at checkout.

Below is a clear plan. Each step ties to current Canadian rules and card-network programs. No guesswork.

What changed, in plain terms

• Lower interchange for small merchants. Ottawa reached deals with Visa and Mastercard that took effect in October 2024. Eligible small businesses get an average 0.95% interchange on domestic consumer credit in-store and a 10 bps cut for many online transactions. Government says over 90% of small and mid-size firms benefit, with total savings near $1B over five years.
• Who qualifies. The small-merchant programs key off annual card volume with each network. Visa eligibility at ≤ $300,000 in annual Visa volume. Mastercard at ≤ $175,000 in annual Mastercard volume. Non-profits below those levels qualify too.
• Network documents back this up. Visa’s Small Merchant Interchange Program spells out the ≤ $300,000 threshold. Mastercard published updated Canada interchange tables showing reduced small-business categories.
• Pass-through is not optional. Canada’s Code of Conduct for the Payment Card Industry gives you the right to exit your contract without penalty if an acquirer fails to pass along an applicable interchange reduction. FCAC’s guidance template shows the exact language.

Step 1: Confirm you’re classified as a small merchant with each network

Pick up your last two merchant statements. You’re looking for two things:

1. Your annualized Visa and Mastercard volume, counted separately.
2. Evidence of the small-merchant program on your rate table.

If your Visa volume is at or below $300k, you should be on the Visa small-merchant rates. If your Mastercard volume is at or below $175k, you should be on Mastercard’s small-business categories. If your statement still shows older categories, ask your processor to reclassify you. Cite the federal agreement and the network materials by name.

Script you can send your processor

Hi team,

We qualify for the small-merchant interchange programs. Our Visa annual volume is $___ and Mastercard is $___. Please confirm our profile and that you have applied the current Visa 0.95% average in-store program and the Mastercard small-business categories, including the online reduction. If not yet applied, please update our pricing and confirm the effective date.

Thanks.

If you get pushback or a vague reply, point to your Code of Conduct right to cancel if a reduction in applicable interchange is not passed through. That right exists for merchants in Canada.

Step 2: Check how your pricing model treats reductions

There are two common models:

• Interchange-plus. Your fees float with the underlying interchange. When interchange falls, your cost should fall automatically.
• Blended or flat rate. A single rate that may or may not change when interchange changes. Under the Code of Conduct, processors must give clear monthly statements and advance notice of changes. The updated Code took effect Oct 30, 2024 with stronger disclosure rules so you can compare offers.

If you’re on a blended plan and didn’t see savings after October 2024, ask for a written breakdown or move to interchange-plus. If they won’t adjust, the Code gives you an off-ramp.

Step 3: Re-price small online sales and recurring invoices

The federal deal included a 10 bps reduction for many online domestic consumer credit transactions for qualifying small merchants. If you run subscriptions or remote card billing, that matters over a year. Ask your provider to confirm the reduced online category is flowing through to you. Stripe’s Canadian notice references these network changes for qualifying small businesses too.

For B2B invoices, you can still take cards where it helps collections, and steer to lower-cost rails for the rest. The Code lets you offer discounts for different payment methods. A small debit or bank transfer discount posted up-front can nudge payers to cheaper options without confrontation.

Plain sign copy you can use

Pay by debit or Interac e-Transfer and save 1% at checkout. Credit accepted at regular price.

That approach feels better than arguing over fees at the counter, and it’s fully aligned with the Code.

Step 4: If you plan to surcharge, follow Canada-specific rules to the letter

Some owners plan to surcharge instead of discounting. It can work in certain niches, though it can irritate customers if done poorly. If you go that route:

• Legal status. Credit-card surcharging is allowed across Canada except Quebec. The provincial consumer authority in Quebec says charging extra for paying by credit or debit is prohibited.
• Cap and notice. Visa’s Canada rules set a hard cap of 2.4%. You must stay at or under the lesser of your average merchant discount rate or 2.4%. You must give your acquirer at least 30 days’ notice before starting. You must disclose the surcharge at the door, at the point of payment, and on the receipt. Mastercard has similar guidance and allows either brand- or product-level surcharging, subject to a cap.

If you operate nationally, a clean path is to use discounts instead of surcharges so your policy works in Quebec too. The Code explicitly allows discounts by payment method and by card network, as long as you disclose them clearly.

Step 5: Keep your eligibility each year

Networks reassess who qualifies for the small-merchant programs on an annual cycle. Banks and acquirers have published timelines showing reassessment windows after the first year. Stay under the thresholds with each network to keep the reduced categories. If you grow past them, plan for the cost change.

What savings should you expect

The government described reductions up to 27% for eligible small businesses. Your exact number depends on mix of card types and channels. A simple way to sanity-check:

• Pull last year’s card-acceptance cost.
• Multiply by 0.27 for a rough upper-bound savings estimate.
• Compare to what you actually paid after October 2024.

If the gap is large, bring that math to your provider and ask where the savings went. The Code strengthens your position in these talks.

Quick checklist you can run this week

• Map your volumes. Confirm Visa ≤ $300k and Mastercard ≤ $175k, or not, for the current year.
• Read your statement. Look for small-merchant categories and the lower online rates where relevant.
• Lock in pricing that floats with interchange. Or get a firm blended rate that reflects the new economics.
• Choose your customer policy. Post a debit/e-Transfer discount. If you surcharge, follow the cap, notice, and disclosure rules, and avoid Quebec for surcharges.
• Set a reminder before your reassessment window. Confirm you still qualify or budget for a change.

A few edge cases owners asked about

Where this fits your finance stack

Lower card costs help, though cash flow still lives or dies on how fast you convert invoices and which payment methods people pick. If your invoicing or cash-flow tool can tag payment methods and report the cost of acceptance by method, turn that on. Use the data to set a fair discount for debit or e-Transfer, and to pick which card rails you promote on invoice links. Tools like Vitality Cash, which focus on receivables and cash clarity, can help you see these patterns and nudge payers to the lower-cost route without making checkout feel hostile. Keep it subtle and clear.