Could This Be The End of Credit Card Interchange Fees? + MORE Nov 4th

(Kali Nine LLC/Getty Images)
OTTAWA – Canada’s major banks and credit card companies have reached a deal with the federal government to cut the fees charged to merchants for credit transactions, sources familiar with the negotiations say.
The voluntary agreement could mean cost savings for up to 700,000 large, medium-sized and small businesses across the country.
However, it remains to be seen whether the cuts will translate into savings for consumers.
The deal will result in lower interchange fees charged to retailers and service providers for using credit cards to complete direct transactions, said sources speaking on condition of anonymity because they weren’t authorized to discuss the matter publicly.
The fees would then be capped for an unspecified period of time.
The agreement comes after years of back-and-forth among retailers, the federal government, banks, credit card companies and the Competition Tribunal.
Interchange fees currently range between $1.50 and $3 or more for every $100 worth of transactions, depending on the credit card…

Did you know – each time a credit card is used to make a purchase in-store, a fee is charged to the merchant? Ranging from 1.5 per cent to 4 per cent, these charges – known as interchange fees – have long been a point of contention among retailers. The issue has plagued the Conservative government for many years and, after announcing it would be addressed in the last Throne Speech (and with the federal election looming in 2015), the Tories are taking action. Or at least, they’re trying to.
What is Being Discussed
The federal government is asking for a voluntary reduction of credit card interchange fees by 10 per cent. With MasterCard and Visa owning over 90 per cent of the credit card market, the negotiations are ongoing.
MasterCard and Visa don’t benefit directly from interchange fees – it’s the big banks that are earning a tidy sum. MasterCard and Visa are vehemently opposed to regulation, saying there’s no proof that the savings will be passed along by retailers to consumers…

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Stay tuned: We’ll have the latest updates as soon as they become available.
Credit card history may be made today; the long-awaited outcome of retailers’ and government efforts to reduce credit card interchange fees could to go public this evening after markets close. While it’s unknown whether the government’s request for a full 10 per cent reduction will be realized, it’s anticipated that the change will be voluntarily introduced by credit card providers MasterCard and Visa, and that it will be impactful. Says Canadian Federation of Business President and CEO Dan Kelly in an interview with MoneyWise, “We’re hoping for a meaningful reduction in credit card processing fees, and that it will be noticeable when merchants will receive their bills.”
Also read: Is this the End of Credit Card Interchange Fees?>
So – Is This Good News for Consumers?
In theory, any reduction in costs for retailers could translate to savings for consumers at the till – but passing them down would be at the discretion of individual retailers; the ability to absorb any savings from a fee cut would vary based on the size and profitability of the business…