Visa is opening its lower interchange rate to stores with up to $750,000 in Visa sales. Newly eligible health retailers can keep thousands a year, while stores already in the program face a 2027 network fee that erases their cut on small baskets.
On October 24, Visa opens its lower small merchant interchange rate to businesses with up to $750,000 in annual Visa sales, more than double the previous ceiling of $300,000, and trims the rate for everyone already in the program. The Canadian Federation of Independent Business (CFIB), which announced the change, also flagged the catch. In April 2027 Visa will add a fixed network fee of 1.8 US cents to every domestic transaction, matching a fee Mastercard is rolling out now.
For a health retailer those two moves pull in opposite directions, and the store’s size and average basket decide which one wins. Owners who have just crossed into eligibility stand to keep well over a thousand dollars a year. Owners who were already in the program will see the fee absorb most of their cut, and on a $14 sale of a kombucha and a protein bar it absorbs all of it.
The program dates from a 2023 agreement between Ottawa, Visa and Mastercard that took effect in fall 2024 and brought in-store credit interchange for small merchants down to a weighted average of 0.95 per cent. Mastercard’s eligibility ceiling of $175,000 is staying put.
Who qualifies now
Eligibility is measured on Visa volume alone. Debit, Mastercard, American Express and cash sit outside the calculation, so a store with $1.5 million in total sales can easily fall under the new line. Retailers who assumed they had outgrown the program should add up the Visa totals from their last twelve monthly statements before drawing that conclusion.
The two networks now treat the same store differently. A shop with $400,000 on Visa and $250,000 on Mastercard qualifies for the lower Visa rate while paying full price on every Mastercard sale.
Health grocers have the most to gain from checking. When the original deal was finalized, the Canadian Federation of Independent Grocers said its thresholds were too low for any small or medium grocer to benefit. The higher Visa ceiling brings part of that group in, although full-line stores with several million in sales may still be over it.
What the saving comes to
Visa’s published general rate for in-store consumer credit is 1.25 per cent on Classic, Gold and Platinum cards and 1.57 per cent on Infinite. Some merchant categories already pay less through industry programs, such as 0.95 per cent under Grocery and Food Retail. Under the new schedule, small merchants pay 0.70 per cent in store on Classic cards and 0.89 per cent on Infinite, down from 0.77 and 0.99.
Take a newly eligible store running $500,000 a year through its Visa terminals. Each tenth of a percentage point on that volume is $500, so moving off the general Classic rate keeps $2,750 in the business and moving off the grocery rate keeps $1,250. On Infinite cards the gain is $3,400. Dan Kelly, CFIB’s president, said these merchants “will save thousands each year,” and at that volume he is right.
A store already in the program with $200,000 in Visa sales gets $140 a year from the Classic reduction and $200 from the Infinite one.
These figures are illustrative. They treat all volume as in-person consumer credit at a single rate and leave out processor markups, business cards and online sales, which carry their own rates.
How the 2027 fee changes the sum
Interchange is charged as a share of the sale, so a rate cut is worth more on a big basket. The network fee is a fixed amount. At the October 1 exchange rate of C$1.42 to the US dollar, it comes to roughly 2.6 Canadian cents per Visa transaction, whatever the customer buys.
For an existing small merchant, the cut and the fee cancel out at about $37 on a Classic card and about $26 on an Infinite card. Any smaller sale will cost the store more after April 2027 than it did before this October. The kombucha and protein bar save 1.4 cents in interchange and pick up 2.6 cents in fees.
The newly eligible store barely feels it. At a $45 average ticket, its $500,000 in Visa sales comes from about 11,100 transactions, so the fee totals under $300 a year against savings of $1,250 or more.
Mastercard got there first. CFIB says its fee now covers all domestic transactions, and the network fee notice from processor Moneris lists Mastercard’s Network Access and Brand Usage fee at US$0.022035 per domestic transaction from October 19, a little above CFIB’s figure. Retailers should budget from what their own statement shows. Corinne Pohlmann, CFIB’s executive vice-president of advocacy, called it “disappointing to see Visa and Mastercard increase their own slice of the payment fees.”
Why some stores will never see the cut
All of this assumes the processor passes the new rate along. Merchants on interchange-plus pricing pay interchange at cost plus a disclosed margin, so their statements reflect the lower rate automatically. Blended and flat-rate plans, common with tablet point-of-sale systems and e-commerce platforms, charge one percentage per sale, and the processor keeps any drop in interchange unless it decides to reprice. Network fees cut the other way on those plans. Some providers absorb them, and others recover them at the next rate review.
The account also has to be coded as a small merchant, and nothing on a statement total shows whether that has happened.
The case for leaving customers alone
A cent or two lost on a small basket is no reason to steer shoppers toward debit or put a minimum on card purchases. One $6 add-on at the till earns more margin than the fee gap on several dozen small sales, and pressure at the counter makes that add-on less likely. Supplement-led stores have even less to worry about. With average baskets above $40, an existing small merchant still comes out ahead on both card types after April.
Questions to put to your processor
- Will my account be coded for Visa’s small merchant rate on October 24, and what annual Visa volume are you basing that on?
- Am I on interchange-plus pricing, and if not, will my rate change when interchange falls?
- Which network fees do you charge me per transaction, and what will Visa’s April 2027 fee add to my annual cost?
- What would my effective rate be on interchange-plus at my current volume?
Frequently asked questions
Does American Express offer a similar small business rate?
No. The 2024 agreements covered Visa and Mastercard only. CFIB is calling on Mastercard and the other card brands to follow Visa’s lead and has pushed for American Express to join since the original deal.
Are online sales included?
Yes, at separate card-not-present rates. Visa’s small merchant online rate drops from 1.30 to 1.20 per cent on Classic cards and from 1.55 to 1.45 per cent on Infinite.
What happens with premium cards such as Visa Infinite Privilege?
Their rates fall too, from 1.80 to 1.70 per cent in store and from 2.30 to 2.20 per cent online. Infinite+ online transactions go from 2.20 to 2.05 per cent.
Are debit costs changing?
Slightly. Moneris reports that the Interac switch fee on card-present debit rises from $0.015803 to $0.016315 per transaction on November 1, 2026.
Figures current as of October 20, 2026. Rate arithmetic is illustrative.
Sources
- CFIB, “Visa lowers interchange fees for tens of thousands of small businesses, but new credit card fees are on the horizon”, October 14, 2026
- Visa Canada, interchange rate schedule
- Moneris, Payment Card Network Fee Updates, October 2026
- Investment Executive, “Feds finalize agreements lowering credit card transaction fees for small biz”
- Exchange rate, USD to CAD, October 1, 2026
