Almost every Canadian business that takes cards is paying a rate it can't fully explain. That isn't carelessness — processing statements are genuinely hard to read, and some pricing models are built that way. This guide breaks the fee into its three real parts, covers the reduction that took effect in October 2024, and shows you how to work out what you're actually paying.
What you're actually paying for
Every card transaction carries three separate costs. They arrive on your statement bundled together, which is why the total feels arbitrary.
Paid to the bank that issued your customer's card. This is the largest component, it's set by Visa and Mastercard rather than your processor, and it varies by card type — a premium rewards card costs you more than a basic one.
Paid to Visa or Mastercard themselves for running the network. Small relative to interchange, and effectively fixed — nobody negotiates these.
What your processor keeps. This is the only part that is genuinely negotiable, and the only part that differs meaningfully between providers.
The practical consequence: when someone quotes you a lower "rate," ask which component moved. If interchange and assessments are the same for everyone, the only honest comparison is the markup — and whether you can see it at all.
What changed in October 2024
After years of lobbying, largely led by the Canadian Federation of Independent Business, the federal government reached agreements with Visa and Mastercard to cut interchange for qualifying small businesses. The new rates took effect on 19 October 2024.
Source: Department of Finance Canada, October 2024. A further reduction followed in October 2025, when the interchange rate under Visa's small-merchant electronic programme was lowered again for its core consumer credit products.
Do you qualify?
Eligibility is assessed per card brand, on your annual volume — so it's entirely possible to qualify with one network and not the other. Visa and Mastercard determine this themselves; you don't apply.
- Visa — up to roughly $300,000 in annual Visa sales volume.
- Mastercard — up to roughly $175,000 in annual Mastercard credit volume.
- Eligibility is reviewed annually, and newly opened businesses generally qualify from the start.
If you're near either threshold, it's worth knowing which side you fall on before you compare quotes — a processor quoting you a headline rate may be assuming one and not the other.
Did your processor pass it on?
This is the part most business owners never check, and it's where the money actually is. The reduction lowered what processors pay in interchange. Whether that reached you depended entirely on your pricing model — and on your processor's willingness.
When the changes landed, CFIB publicly flagged that not every payment company intended to pass the savings through to merchants. If you were on a flat-rate plan, your price by definition didn't move: that's what flat rate means. Your processor's cost fell; your rate didn't.
Pull a statement from before October 2024 and a recent one. Divide total fees by total card volume in each. If your effective rate is unchanged — and your business qualifies — the reduction went to somebody, and it wasn't you.
Flat rate vs tiered vs interchange-plus
Three models dominate the Canadian market. They differ less in what they cost than in what they let you see.
None of these is inherently dishonest. But only interchange-plus makes the three components visible, which means it's the only one where a rate cut automatically reaches you and the only one where you can see exactly what your processor keeps. It's the model Telebridge sets clients up on through Paystone, for that reason.
Working out your real effective rate
Ignore the headline number you were quoted. The only figure that matters is your effective rate:
Include everything — monthly fees, statement fees, PCI fees, terminal rental, minimum charges. Those line items are where a headline rate quietly becomes something else. Do it across three months to smooth out the mix of cards your customers happen to use.
If you'd rather not dig through statements first, our processing fee calculator will show you the shape of it from your monthly volume, and what the same volume looks like on interchange-plus.
What the Code of Conduct gives you
Alongside the rate reduction, a revised Code of Conduct for the Payment Card Industry in Canada took effect from 30 October 2024. All major card networks operating in Canada agreed to it. Two parts matter practically:
- Comparable pricing. Processors must present pricing and offers in a way that lets you actually compare providers — aimed squarely at the tactic of quoting incomparable headline rates.
- Faster complaints. Complaint-handling response times were shortened substantially, to 20 business days.
You also retain long-standing rights under the Code, including the ability to exit a contract without penalty when your processor raises fees or changes terms. Worth remembering if you've been told you're locked in.
Questions to ask before you sign
- Is this interchange-plus, tiered, or flat? If the answer is vague, that's the answer.
- What is your markup, stated separately? A provider on interchange-plus can tell you in one number.
- Do I qualify for small-business interchange on Visa and Mastercard — and will it show on my statement?
- What are the monthly, PCI, statement, minimum and terminal charges? Get the full list, not the rate.
- What's the term, and what happens if you change my pricing?
- Who do I call when the terminal stops working on a Saturday? Not a fee question, but it's the one you'll care about most.
FAQ
There isn't one number, because interchange varies with the cards your customers carry. A better test is whether you can see your markup as a separate figure. If you can, you can judge it. If you can't, the rate is unknowable by design.
Usually the mix of cards changed — more premium rewards cards, more online or keyed transactions, or more cards issued outside Canada. On tiered pricing it can also mean more transactions were sorted into a costlier bucket.
Credit card surcharging is permitted in Canada subject to network rules, caps and disclosure requirements, with its own provincial nuances. It shifts the cost rather than reducing it, and it changes the checkout experience — worth weighing carefully rather than treating as a default fix.
Less than most people expect. The bigger considerations are usually your POS integration and any existing terminal contract, not the switch itself. Check your Code of Conduct exit rights before assuming you're tied in.
Send a recent statement and we'll work out your effective rate and tell you honestly whether it's worth changing. If it isn't, we'll say so.
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