The Government of Canada announced it has finalized agreements with Visa and Mastercard to lower credit card transaction fees for small businesses. The agreements also protect reward points offered to Canadian consumers by Canada’s large banks.

SSmall businesses pay fees to process credit card transactions, with the largest component being the interchange fee paid to credit card–issuing financial institutions, such as banks. These new agreements will help more than 90% of credit card–accepting businesses in Canada qualify for lower rates and see their interchange fees reduced by up to 27% from the existing weighted average rate. These reductions are expected to save eligible Canadian small businesses about $1 billion over five years.