PURCHASE, N.Y.—Visa and Mastercard have agreed to cut Canadian credit-card transaction fees in a move that could save smaller businesses C$250 million ($192 million) a year and crimp revenue for Canadian lenders.
The U.S. companies agreed to reduce the average annual interchange rate in Canada by 10 basis points to 1.4% on cards, Canada's finance department said. The new rate takes effect in 2020 and runs for five years.
The government estimated that small and medium-sized businesses could save C$25,000 over the period, Bloomberg reported.