Visa Cuts Canadian Small-Merchant Interchange From 24 October, But the Fee Clock Is Already Running

TL;DR

From 24 October 2026, Visa Canada raises the annual Visa-volume threshold for its Small Merchant Interchange Program from CAD 300,000 to CAD 750,000 and reduces rates for eligible merchants. The change brings many more businesses into lower interchange pricing, but it does not guarantee a lower total processing bill. Mastercard’s new network fees, Visa’s planned 1.8-cent USD fee, higher Visa business-card interchange and an Interac assessment increase all add pressure. The decisive question for merchants is whether their processor passes the Visa savings through.

The threshold increase is the headline: many more merchants can qualify

Visa’s threshold is increasing 2.5 times, from CAD 300,000 to CAD 750,000 in annual Visa volume. That is the most consequential part of the change: it moves a broad group of cafés, clinics, trades businesses and online sellers into a preferential pricing tier.

The expanded program takes effect on 24 October 2026. Eligibility is based on Visa transaction volume across all acquirers during the qualification period, not necessarily the volume processed through one provider. Processor notices describe an annual review period such as 1 October 2024 to 30 September 2025. Merchants should check the applicable assessment period and the volume measure Visa uses for their account.

For POS providers, ISOs and PayFacs, this is a portfolio repricing event. Merchants between CAD 300,000 and CAD 750,000 in Visa volume should be identified, requalified and informed of what changes on their statements. Visa’s rate schedule sets out the new rates; Moneris’ program information also explains qualification and annual assessment.

Visa’s lower rates help, but the saving depends on card mix

For qualifying small merchants, Visa is lowering interchange across several consumer-credit transaction types. Examples include:

Visa card and transaction type	Previous rate	New rate
Classic, Gold or Platinum, card-present	0.77%	0.70%
Classic, Gold or Platinum, card-not-present (CNP)	1.30%	1.20%
Classic, Gold or Platinum, tokenised CNP	1.25%	1.15%
Visa Infinite, card-present	0.99%	0.89%
Visa Infinite, CNP	1.55%	1.45%
Visa Infinite, tokenised CNP	1.50%	1.40%

Higher card tiers also receive reductions. For example, the small-merchant Infinite+ CNP rate falls from 2.20% to 2.05%, while Infinite Privilege CNP falls from 2.30% to 2.20%. The exact benefit depends on eligibility, card tier, how the transaction is processed and whether it qualifies as tokenised.

These are interchange changes, not a promise that a merchant’s total payment processing costs will fall by the same amount. Interchange is paid to the card-issuing bank. The processor’s pricing model, other network fees and merchant markup also affect the final bill.

Pass-through determines whether the headline saving reaches the merchant

Visa’s reduced rate matters to a merchant only if their processor passes it through. That is why October statements should be treated as a trust exercise for acquirers, processors and ISOs, and a verification exercise for merchants.

The Canadian Code of Conduct for the Payment Card Industry includes notice requirements when applicable core network fee reductions are not passed through in full. Those requirements make some changes checkable, but merchants should still ask how this specific interchange reduction appears in their pricing.

A merchant on interchange-plus pricing may be able to see the underlying rate change more clearly. A flat-rate or blanket-pricing provider may keep the headline rate unchanged, leaving the customer to establish whether the saving was passed on. The practical question is simple: Did my rate move?

Visa is not making the same change as Mastercard. Mastercard’s small-business threshold remains CAD 175,000, according to the Canadian Federation of Independent Business (CFIB). CFIB president Dan Kelly called Visa’s expansion “a big win” for newly eligible businesses, while the organisation is urging Mastercard and other brands to follow.

DCAP trades richer transaction data for lower CNP interchange

Visa’s optional Digital Commerce Authentication Program (DCAP) also begins on 24 October. It offers an interchange incentive on qualifying consumer-credit CNP transactions when merchants provide enhanced transaction data, including device ID, IP address, email address and billing address.

The incentive is 10 basis points, offset by a new 5-basis-point Enhanced Data Program fee. An indicative net reduction of about 5 basis points. For core consumer cards, the Visa schedule shows a small-merchant CNP-DCAP rate of 1.10%, compared with 1.05% for CNP-DCAP transactions that are also tokenised.

The strategic point is bigger than the immediate saving. DCAP rewards merchants and gateways for supplying the data needed to support more authentication-rich digital commerce. Businesses that can capture and pass this information reliably may gain both a modest reduction in CNP interchange and an operational head start as digital payment experiences evolve. For e-commerce teams, DCAP belongs in discussions about data quality, checkout flows, tokenisation and mobile wallet adoption, not just fee schedules.

New and rising fees could offset some of the reduction

The fee clock is already running alongside Visa’s interchange cuts. CFIB says Mastercard is expanding a 1.8-cent USD fee to all transactions, while Visa plans to introduce an equivalent fee on domestic transactions from April 2027. The fee is initially charged to processors and may be passed on to merchants; the impact will depend on how each provider applies it.

Other changes add to the mix. Mastercard’s new Acquirer Network Access and Brand Usage (NABU) fee in Canada takes effect on 19 October 2026, replacing Acquirer Clearing Fees, according to processor notices including TD Merchant Solutions’ fee summary. Visa’s Canadian Business Credit Standard rate rises from 2.00% to 2.15% from late October. Interac’s assessment fee increases on 1 November, from about CAD 0.0158 to CAD 0.0163 per transaction.

The combined effect depends on a merchant’s payment mix. A business with more eligible small-merchant consumer credit transactions may benefit from percentage-based interchange reductions. A low-ticket business, such as a café or quick-service restaurant, with high contactless payments volume may feel per-item fees more acutely. A retail payment strategy should therefore model transaction value and volume together, rather than treating a lower interchange rate as proof of lower total costs.

The same pricing pattern matters beyond Canada

Canada’s changes illustrate a wider payments pattern: targeted small-merchant relief, pressure from fixed network fees, and incentives for more detailed digital transaction data.

In Australia, the RBA’s surcharge changes and lower domestic interchange caps took effect on 1 October 2026. The policy details differ, but the commercial challenge is familiar: changes to network economics do not automatically translate into clear merchant savings. Acquirers and processors need to explain what changed, what was passed through and what remains in the merchant’s effective rate.

For payment providers, this is also a service opportunity. Clear eligibility checks, statement-level comparisons and credible explanations of new fees can build trust, and help merchants make decisions based on their actual transaction mix. RivaTech has also explored how the in-store payments stack is changing in the evolving role of the retail terminal.

FAQs about Visa Canada’s 2026 small-merchant interchange changes

When do Visa’s new small-merchant rates take effect in Canada?

The expanded eligibility threshold and the new rate schedule take effect on 24 October 2026.

What is the new Visa small-merchant threshold?

The annual Visa-volume threshold rises from CAD 300,000 to CAD 750,000. Eligibility is assessed using the relevant qualification period and Visa volume across acquirers.

Does the interchange reduction automatically lower my processing bill?

No. Interchange is paid to the card-issuing bank, and the merchant benefits only if their processor passes the reduction through under their pricing arrangement.

What is Visa DCAP?

DCAP is an optional Visa program for qualifying consumer-credit CNP transactions. Merchants provide enhanced data, such as device ID, IP address, email and billing address, in exchange for an interchange incentive. A 5-basis-point Enhanced Data Program fee offsets part of the 10-basis-point incentive.

Is Mastercard raising its small-business eligibility threshold too?

No. Mastercard’s Canadian small-business threshold remains CAD 175,000.

Key takeaway

Visa’s 2.5-fold threshold expansion could reduce interchange for tens of thousands of additional Canadian businesses, but the headline rate is only one part of the bill. Merchants and payment providers should verify eligibility, confirm pass-through on statements and assess percentage-based savings against fixed transaction fees.