Government launches consultations on reducing credit card transaction fees

News release

August 4, 2021 - Ottawa, Ontario - Department of Finance Canada

The pandemic has brought about a rapid and significant increase in electronic payments and online transactions. Small and medium-sized businesses, which have already been hard hit by COVID-19, incur fees for these transactions also known as interchange fees. Canada has amongst the highest interchange fees in the world.

Payments Canada data indicates that 32 per cent of Canadians are reporting greater use of credit cards since the start of the pandemic, and Statistics Canada reports seasonally adjusted e-commerce retail increased by roughly 100 per cent between February 2020 and May 2021. For a typical small or medium-sized business without access to preferential rates, online payments can attract interchange fees that are over twice as high as those for in-store payments. With the increase in e-commerce, this trend could result in a permanent increase to the cost of doing business for Canadian small businesses.

Today, the Department of Finance Canada is launching consultations with the aim of lowering the cost of doing business by reducing credit card transaction fees. These savings will allow small and medium-sized businesses recovering from the COVID-19 pandemic to direct financial resources toward growth and job creation.

As announced in the recent federal budget, the government is seeking input from small business owners, key stakeholders and all Canadians to:

  • lower the average overall cost of interchange fees for merchants;
  • ensure that small businesses benefit from pricing that is similar to large businesses; and
  • protect existing rewards points of consumers.

The government intends to complete the consultation process in the fall and to provide details on next steps in a Fall Economic Statement. As indicated in Budget 2021, the government is prepared to consider legislative amendments to the Payment Card Networks Act that would provide authority to regulate interchange fees, if necessary.

To have your say, please email with “Reducing Credit Card Transaction Fees” as the subject line by September 10, 2021.

Quick facts

  • Interchange fees are set by credit card networks and passed on to merchants by payment card acquirers as a cost for accepting credit card payments by customers. Interchange fees are ultimately passed on to consumers in the form of higher prices for goods and services.

  • Interchange fees vary according to the merchant’s industry, how the payment is transacted (e.g., in person or online), and the type of credit card used (e.g., “premium” cards typically attract a higher level of interchange and are costlier to accept).

  • Small and medium-sized enterprises have less bargaining power than larger merchants to negotiate lower rates and, as a result, are subject to transaction fees that are amongst the highest in the world. 

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Department of Finance Canada

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TTY: 613-369-3230

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