Credit Card Companies Agree to Lower Merchant Fees

The federal government has reached new agreements with three major credit card companies, which will take effect in 2020, that will provide welcomed relief for foodservice operators, who spend billions of dollars each year on credit card interchange fees and other processing fees.

Visa and Mastercard have committed to lower the fees they charge businesses to an average annual effective rate of 1.4 per cent — down from 1.5 per cent — for a period of five years and narrow the gap between the highest and lowest rates they collect from retailers. American Express has promised to provide more fairness and transparency as part of a separate voluntary agreement that recognizes its unique business model.

Shanna Munro, Restaurants Canada President & CEO, and David Lefebvre, Vice President, Federal & Quebec, welcomed these new agreements as a step in the right direction, following an announcement in Ottawa on Aug. 9 from Finance Minister Bill Morneau and Mary Ng, Minister of Small Business and Export Promotion (click here to read their statements).

Shanna Munro, Restaurants Canada President & CEO (right) with Mary Ng, Minister of Small Business and Export Promotion on Aug. 9.
Shanna Munro, Restaurants Canada President & CEO (right) with Mary Ng, Minister of Small Business and Export Promotion.


The fees that credit card companies charge Canadian businesses are among the highest in the world and have long been a major concern for foodservice operators across the country — 80 per cent of Restaurants Canada’s members say they hurt their bottom line. Interchange and other fees continues to rise as consumers are enticed by premium reward cards. The rewards are financed not by the card companies or issuers, but by restaurateurs and other small businesses.

Restaurants Canada has a long track record lobbying for a reduction in credit card interchange fees to alleviate their burden on small- and medium-size businesses, including supporting the work of MP Linda Lapointe (click here to learn more about her private member’s bill).

As a next step, Restaurants Canada is looking forward to working with the federal government to provide foodservice businesses with even greater relief from these fees by:
• placing a cap on interchange fees
• prohibiting credit card issuers from increasing and adding new fees without regulatory oversight
• removing interchange fees from the tips and taxes portion of purchases

For more information, check out the following articles:
Credit card firms to trim merchant fees, but some retailers ‘underwhelmed’ (National Post)
Visa, Mastercard, Amex Agree to Trim Interchange Fees in Canada (The Washington Post)

If you have any questions or concerns, you can send them to David Lefebvre, Restaurants Canada Vice President, Federal and Quebec, at