Flat Rate vs Canada's Card Fee Cut: Restaurants

Why this matters for restaurants now

Visa Canada's notice of September 4, 2026 says its small merchant in-store rate for Classic, Gold and Platinum consumer credit cards drops from 0.77% to 0.70% on October 24, 2026, and that the program will cover businesses with up to CAD 750,000 in annual Visa volume, up from CAD 300,000. Many independent restaurants and cafés sit in that range. Whether any of it reaches your bill depends on how you are priced.

How a flat rate works

A flat rate charges one percentage, sometimes plus a fixed amount, on every card sale. It is easy to understand and easy to budget. The processor pays the real costs underneath: interchange to the card-issuing bank, network fees, and its own costs. When those costs fall, the processor's margin grows unless it lowers your rate. Nothing in a flat-rate statement shows you the change.

What happened in 2024

The Department of Finance says the small business credit card fee reductions took effect on October 19, 2024, and describes them as cuts of up to 27 per cent. In a press release that week, the Canadian Federation of Independent Business said most major processors had committed to passing on the savings, but that one major processor had stated publicly that it intended to keep its rates the same. A cut in the networks' rates did not automatically become a cut on every merchant's bill.

How interchange-plus shows a cut

On interchange-plus pricing, the interchange cost and the processor's markup are listed separately. When interchange falls, the interchange line falls and the markup stays where it was, so you can see the change arrive. Interchange-plus is not always cheaper; it depends on your card mix and the markup. But it makes changes visible, which a flat rate does not.

Three questions to ask your processor

1. Am I on flat rate, tiered or interchange-plus pricing? 2. Will the October 24, 2026 Visa change be reflected on my statement, and how? 3. If it will not, why not? Ask in writing and keep the reply. Under the Code of Conduct for the Payment Card Industry in Canada, processors must tell you if they will not pass on applicable domestic network core fee reductions in full, according to the Financial Consumer Agency of Canada. Then compare your November statement, which covers October, with September.

What changes for restaurant groups and larger operators

A group with several locations may have one merchant account or several. Eligibility for the small merchant program is based on annual Visa volume per account, so some locations may qualify and others may not. Larger operators above the threshold will not see the small merchant rates at all, but they still benefit from knowing exactly what they pay for interchange versus markup. Review effective rate by location, check tip adjustments and card-not-present orders such as online ordering separately, and make sure your contract states how network cost changes are passed through.