Cost examples and choosing a best-fit processor
Online payment gateway fees in Canada: card-not-present costs for e-commerce
What Canadian online sellers pay to accept cards: card-not-present rates, gateway fees, fraud tools, cross-border and currency costs, with worked examples.
Accepting cards online costs more than in person, for two reasons. Interchange is higher for card-not-present transactions because the risk of fraud is higher, and online sellers usually pay for a payment gateway (the service that securely passes card details from your checkout to the processor), either as a separate fee or bundled into an online rate. Online sellers also carry more chargeback risk, may pay for fraud-screening tools, and can face cross-border and currency conversion costs. A typical online quote is a percentage plus a fixed per-transaction fee; because of the fixed part, small online tickets have a much higher effective rate.
This guide belongs to the estimates and choosing section. Rates are illustrative.
The parts of an online card fee
| Part | What it is | How it is often priced (illustrative) |
|---|---|---|
| Card-not-present interchange | Paid to the issuer; higher than in person | Inside the rate (flat) or passed through (interchange-plus) |
| Network fees | Paid to the card network | Inside the rate or passed through |
| Processor markup | Processor's margin | Percentage + per-transaction amount |
| Gateway | Secure transmission, tokenisation, checkout integration | Monthly fee and/or per-transaction fee, or bundled |
| Fraud tools | Screening, 3-D Secure authentication | Included, or per-screened transaction |
| Cross-border / currency | Foreign cards, foreign currency pricing | Extra percentage on affected transactions |
| Chargebacks | Disputes | Per-dispute fee plus the lost sale if you lose |
Why the fixed per-transaction fee matters
Illustrative online pricing: 2.9% + $0.30 per transaction.
| Order value | Fee | Effective rate |
|---|---|---|
| $10 | $0.59 | 5.90% |
| $25 | $1.03 | 4.10% |
| $50 | $1.75 | 3.50% |
| $150 | $4.65 | 3.10% |
| $500 | $14.80 | 2.96% |
An online seller with many small orders should look closely at the fixed part of the quote and at minimum order values, bundles or subscriptions that raise the average ticket.
Worked example: a month for a small online shop
Illustrative: $10,000 of online card sales in 200 orders (average $50), on 2.9% + $0.30 with a $25 monthly gateway fee.
- Percentage: $10,000 × 2.9% = $290.
- Per transaction: 200 × $0.30 = $60.
- Gateway: $25.
- Total: $375, effective rate 3.75%.
The same shop on interchange-plus with an illustrative average online interchange plus network fees of 1.95%, markup 0.30% + $0.10 and a $25 gateway fee: $195 + $30 + $20 + $25 = $270, or 2.70%. Whether a real quote produces that kind of gap depends on your card mix. Run your own figures in the card fee calculator.
All-in-one platforms versus separate gateways
Many e-commerce platforms include their own payment processing, so the platform subscription, the processing rate and the payout schedule come from one provider. Others let you connect a separate gateway and merchant account.
| Set-up | Often a fit for | Check |
|---|---|---|
| Platform's built-in payments | New or small stores that want one bill | Rates per channel, extra fees for using a third-party processor, payout timing |
| Separate gateway + merchant account | Higher volume, existing processor relationship | Gateway fees, integration effort, who handles PCI scope |
| Invoicing / payment links | Service businesses billing clients | Per-invoice rates, card-not-present rates on manual entry |
| Recurring billing | Subscriptions and memberships | Card updater services, failed payment retries, cancellation rules |
Fraud, authentication and chargebacks
Online, you are usually liable for fraudulent transactions unless an authentication method shifts liability (for example, 3-D Secure where it applies). Chargebacks cost a fee plus the sale if the dispute is lost. Practical steps: use the address and security code checks your gateway offers, enable authentication, describe products accurately, ship with tracking, and make your business name recognisable on the card statement. See chargebacks and dispute fees.
Card data and PCI
Hosted payment pages and tokenisation keep card numbers off your servers and can reduce your PCI DSS scope. If card data passes through your systems, your compliance obligations are larger. See PCI compliance fees. Customer personal information you collect at checkout is covered by PIPEDA in most provinces, or by provincial privacy laws such as Quebec's private-sector privacy Act.
Cross-border sales and currency
Selling to customers outside Canada can add cross-border fees and, if you price in another currency, conversion costs. Pricing in Canadian dollars and letting the cardholder's bank convert avoids your conversion fee but may affect conversion rates at checkout. Ask for each cross-border and currency fee in writing.
Online surcharges and Quebec
The credit card surcharging rules also apply online: the surcharge must be disclosed before payment at the point of sale online, among other conditions. Surcharges are not allowed in Quebec; an online store selling to Quebec consumers should not add one to their orders. See credit card surcharge rules.
FAQ
Is Interac available online?
Interac offers online debit payment options through participating providers, priced differently from in-person debit. Ask your processor what is available and how it is priced.
Do I need a separate merchant account for online sales?
Not with many all-in-one platforms. Larger businesses may prefer a dedicated merchant account with a gateway. Compare total cost and terms.
Are keyed phone orders priced like online orders?
Usually yes, as card-not-present. They may carry an even higher rate on some plans. Check your cost per transaction disclosure.
Sources
- FCAC: Accepting card payments — merchant rights and surcharge rules
- Office of the Privacy Commissioner of Canada — PIPEDA obligations for businesses
- PCI Security Standards Council — PCI DSS and self-assessment questionnaires
- Canadian Anti-Fraud Centre — fraud trends affecting businesses
- Canadian Centre for Cyber Security — security guidance for small businesses
