Merchant payment processing fees in Canada, explained line by line

There is no single typical rate, because the cost depends on how customers pay. Interac debit is usually charged as a flat amount per transaction, while credit cards cost a percentage made of interchange, network fees and the processor's markup, and online payments usually cost more than tapped cards. The way to know your own cost is to divide all fees on a monthly statement by your card sales; see how to calculate your effective rate.

Outside Quebec, Visa and Mastercard rules have allowed merchants to surcharge credit card payments since 6 October 2022, within limits. The FCAC lists a maximum of 2.4% and says the surcharge cannot exceed your actual cost of accepting the card; you must disclose it before payment, at the store entrance and point of sale, and on receipts, and you usually must notify your processor in advance. Surcharges are not allowed in Quebec, and debit and some prepaid cards have their own rules. See credit card surcharge rules.

Under the revised Code of Conduct for the Payment Card Industry in Canada, in effect since 30 October 2024, processors must notify you 30 to 60 calendar days before a fee increase or new fee takes effect. You can then cancel without penalty within 70 days after the effective date, or at any time if proper notice was not given. Increases scheduled in your agreement, such as the end of a promotion, are excluded. See your rights under the Code of Conduct.

Yes, for eligible merchants. Finance Canada announced that from 19 October 2024 Visa and Mastercard lowered interchange for small businesses with annual sales volume under $300,000 on Visa or under $175,000 on Mastercard (assessed per network), with in-store rates reduced to a weighted average of 0.95% and online rates cut by 10 basis points. Whether you see the saving depends on your pricing model and on your processor passing it on. See the small business interchange reduction.

Neither is better for everyone. Flat rate is simple and predictable and can suit low volumes; interchange-plus shows each layer and passes reductions through, which tends to favour steady volumes and debit-heavy or standard-card mixes. Run both quotes on the same month of your own sales and compare total dollars. See flat rate vs interchange-plus vs tiered vs subscription.

Buying usually costs less over several years if the terminal works with your processor and stays supported, while renting includes repairs and swaps and avoids an upfront cost. Be careful with third-party equipment leases: they can run for years and be hard to cancel. Compare the total of all rental or lease payments with the purchase price using the payback calculator.

Card processing fees are generally treated as exempt financial services, so GST/HST is usually not charged on the core discount fees, while terminal rental and equipment purchases are generally taxable. Some separately billed services may also be taxable. Check how each line is taxed on your statement and confirm with the Canada Revenue Agency or your accountant; see GST/HST on processing fees and terminals.

Banks are regulated federally or provincially, and most non-bank payment service providers that perform retail payment functions in Canada must register with the Bank of Canada under the Retail Payment Activities Act. You can search the Bank of Canada's public registry of PSPs. Registration is not an endorsement and does not cover fees or disputes; see RPAA registration checks.