I'll begin again.
Thank you for inviting me to speak to the committee regarding its study of credit card practices and regulations in Canada.
To begin, I thought it might be useful to provide some comments about Visa and our role in the Canadian payment system. I would also like to share some information about interchange, which your study references directly.
Visa has operated in Canada for more than 55 years, supplying Canadian consumers and merchants with one of the most advanced and safest payment networks in the world. While Visa's brand is very well known, many do not understand what Visa does. For example, Visa does not issue credit cards to consumers. It is financial institutions, including banks, fintechs and credit unions, that issue credit and debit cards, set interest rates and consumer fees, and compete to offer rewards and other benefits to consumers. Similarly, it is acquiring banks, not Visa, that sign up merchants to accept card payments. They compete for business based on the services they may offer and the fees they charge.
Visa's role in the system is to maintain a safe and secure payment network, which enables consumers and merchants to transact securely and conveniently. This supports commerce and economic growth across Canada and around the world. When consumers choose to use a Visa card and merchants choose to accept it, they do so with the confidence that their transactions will be processed efficiently, reliably and securely. They also receive the rights, protections and benefits guaranteed for every transaction on the Visa network.
Visa makes significant investments in this network for security and fraud prevention. Over the past five years, Visa has invested over $11 billion in technology, including systems to reduce fraud and enhance cybersecurity. What this means for consumers and small businesses is that Visa blocked $40 billion in fraud in 2023. That's almost double the $23 billion we blocked in 2022. With respect to consumer protection, Visa cardholders rely on our zero-liability protections for unauthorized and fraudulent transactions, or if they receive counterfeit goods.
The Visa network is designed to level the playing field between small and large merchants. Every merchant that accepts Visa benefits from our investments in security and innovation, and can transact securely with billions of Visa cardholders across the globe and know that they will get paid, because Visa stands behind every transaction. By connecting to our network, any small-town or rural store, or any small e-commerce site, benefits from Visa's world-class security and fraud-fighting tools so they can better compete with even the largest retailers and technology platforms.
I also want to provide some information about interchange. Interchange is set by the card networks, such as Visa, but it is paid by merchant-acquiring banks to the banks and financial institutions that issue credit and debit cards. Visa does not earn revenue from interchange. Our goal in setting interchange is to foster balance, security and investment in the payment system. The revenue that fintechs, credit unions and banks generate from interchange ensures they can make the necessary investments in innovation, security and consumer benefits that enable the payment system to operate, grow and adapt. Interchange is also used to promote acceptance, security and innovation by merchants. For example, we set lower interchange rates for transactions that result in lower fraud.
In Canada, Visa has entered into a series of agreements with governments over the past decade with respect to consumer credit interchange. These undertakings have delivered significant reductions for every merchant in Canada, with particular emphasis on reductions for small business. As a result, Visa Canada's overall interchange rates have declined since 2015. Interchange rates for small businesses have been reduced the most. In fact, a further round of reductions for small business will go into effect October 19. These additional commitments will benefit 90% of Canadian small businesses, lowering interchange to an average of 95 basis points—slightly less than 1%—for in-person transactions.
We're proud of the role Visa has played in developing and delivering safe digital payments to consumers and merchants across Canada and around the world. We take our role in the payment ecosystem seriously, and we're deeply committed to delivering value and keeping the trust of those we have the privilege to serve.
Thank you for the opportunity to appear here today. I'm grateful that I can speak about these issues, and I'd be happy to answer any questions you may have.