Ottawa has announced that they have made a five-year agreement with Visa, MasterCard, and American Express to reduce the interchange rate that they charge merchants by about 10 basis points starting in 2020.
This means that Visa and MasterCard will be reducing the fees they collect to an average rate of 1.40% and American Express is committing to providing more fairness and transparency to their fees.
Helcim Merchants will Benefit Automatically
This is great news if you’re already a Helcim Merchant because our Cost+ pricing structure means that the lower interchange rate will be automatically passed on to you. Because Helcim keeps our margin the same for all transactions, if Visa or MasterCard lower the interchange rate, our merchants will be receiving even better processing rates on their transactions.
Merchants Paying a Flat Rate May Not Benefit
While Helcim Merchants will automatically have the lower interchange rates passed on to them, merchants who have signed up with a payment processor who offers a Flat Rate price structure may not see the same savings. This is because the fee that Visa and MasterCard are lowering is the interchange rate that is paid by the payment processor, so it will be up to the payment processor to decide if the lower rates will be passed on to their merchants. If your payment processor offers a flat rate fee structure or tiered pricing, they may choose not to lower the rates for their merchants. Instead, they might choose to keep their rates the same, so they alone can benefit from the lower fees.
Time to Switch to Helcim?
The Canadian Code of Conduct for the Credit and Debit Card Industry protects merchants by allowing them to exit their contracts without penalty if their payment processor does not pass-through the full savings of an interchange rate reduction to their customers. We recommend you contact your current payment processor and confirm that you will benefit from this rate decrease, if not, it may be time to switch providers.
Saving money on your processing fees is just one way your business can benefit by switching to Helcim. We also offer better customer service with our in-house team of Helcim Gurus who are just a phone call or email away when you need them. We also provide better business tools with our all-in-one merchant platform, Helcim Commerce. Learn more about how switching to Helcim can benefit your business.