EXD Impact Update: Visa and Mastercard's 2025 Pricing Updates for Canadian Businesses

Canadian merchants are set to see significant changes in transaction processing costs as Visa and Mastercard update their fee structures starting January 1, 2025. These adjustments, though varying in impact, highlight the importance of staying informed and proactive in managing payment processing expenses. Here's what you need to know:  

Visa Debit Fee Reductions

Visa will implement lower rates for several debit interchange fees, which is great news for Canadian businesses relying on Visa debit transactions. The new rates target specific categories, including general electronic transactions, gas, grocery, and card-present performance programs.  

Key Changes:  

• Most rates are dropping from $0.05 + 0.15%-0.25% to a flat $0.03 per transaction.  

• Industries like gas retail and grocery will particularly benefit from these adjustments.  

High-Level Impact: 

Merchants processing a high volume of debit transactions, especially in gas and grocery, can expect reduced transaction costs.  

This change is poised to enhance margins for small and medium-sized businesses where transaction fees represent a significant expense.  

Mastercard Transaction Processing Fee Increases

Mastercard, conversely, is increasing certain fees under its Transaction Processing Excellence (TPE) Program. These updates aim to incentivize compliance with processing standards but will result in higher costs for merchants not meeting specific criteria.  

Key Changes:  

• Final Authorization Fee rises from 0.339% to 0.3955% per transaction.  

• Nominal amount authorizations and merchant advice codes see a significant increase, from $0.113 USD to $0.2825 USD—a jump of $0.1695 USD per transaction.  

High-Level Impact:

• Non-compliance with processing requirements will now carry steeper penalties, particularly for smaller transactions.  

• Merchants must prioritize compliance to minimize these additional costs.  

What These Changes Mean for Merchants 

1. Cost Savings for Visa Debit Transactions: Merchants in industries like grocery and gas will benefit from reduced interchange fees, improving profit margins.  

2. Increased Costs for Mastercard Non-Compliance: Businesses not meeting TPE requirements will face higher fees, underscoring the need for optimized payment processing practices.  

3. Strategic Opportunity: By leveraging these changes, businesses can reassess and optimize their payment systems to ensure compliance, reduce costs, and maintain competitive pricing.  

How Expense Defence Can Help

At Expense Defence, we specialize in helping businesses navigate pricing changes like these. We analyze your current processing setup, identify areas of improvement, and implement strategies to ensure you maximize savings while staying compliant.  

Stay ahead of these updates and turn them into an advantage—contact us today at (416) 568-8495 or info@expensedefence.com for a tailored analysis of how these changes could impact your business.