Your Guide to Credit Card Processing Fees in Canada

Credit card processing fees might seem arbitrary, but many factors determine the price you pay to process a transaction. Processing fees range from 1% to 3%, which can add up for merchants.

This article explains what's included in processing fees and how costs vary by credit card issuer and card type. It also offers practical strategies for cutting card processing fees for your business. After all, if fees are cutting into your profits, you may want to rethink your payment processing strategies.

What are the most common credit card processing fees?

Credit card fees for Canadian merchants can be broken down into 7 components:

• Interchange fees: These represent the largest portion of your overall processing fee. You pay this fee directly through your credit card network to the card's issuing bank. As of late 2025, the average interchange rate for eligible small businesses is around 0.95%.
• Network assessment fees: These are small fees, usually 0.08% to 0.10% of the total sales processed, which are paid to the credit card company.
• Processor markup fees: The credit card processor charges this fee on every transaction. It's usually the interchange fee plus 0.15% to 0.70%, and then an additional 5 to 15 cents per transaction.
• Terminal fees: To process your transactions in person, you need to either purchase a point-of-sale (POS) terminal or lease one from the payment company. Basically, you must pay a large upfront fee or incur smaller monthly payments.
• Payment gateway fees: To process online transactions, you'll pay these monthly or per-item fees. These are the costs of connecting your online store to a merchant account.
• PCI fees: These fees go to the payment card industry to ensure credit card security and fraud prevention. You can pay a fee of around $10 – $30 per month, plus a $100 – $300 fee if your paperwork lapses.
• Incidental fees: These aren't regular fees. Instead, you pay them if something happens on your end – like you don't have enough money in your account to pay your processing fees.

The government has set a 2.4% surcharge cap on what merchants can pass on to customers. If you place a surcharge on transactions, you're also required to display a notice of the fees at the entrance, at the checkout, on the receipt, and online (if you have a digital storefront).

How processing fees are calculated

A few factors go into calculating how much a merchant is charged.

Card network

Your credit card fees vary by network – Visa, Mastercard, or Amex. Both Visa and Mastercard publish minimum and maximum fees:

While Amex doesn't list its standard fees online, they're believed to be higher than those of Visa and Mastercard. That said, they offer an OptBlue Wholesale Discount Rate for vendors. If you have fewer than $1 million in transactions per year with Amex, you may qualify for lower rates. The fee ranges from 1.6% to 2.4% and varies with both the merchant category and the transaction size.

Type of credit card

You'll pay different fees for each card the company offers. For example, you'll pay lower fees for basic or regular cards and higher fees for premium or elite rewards cards. Here is how Mastercard credit cards rank from lowest to highest fees:

• Core (this tier represents "regular" cards)
• World
• World Elite
• World Legend

Here's how Visa cards rank from lowest to highest fees:

• Classic, Gold, Platinum
• Infinite
• Infinite+
• Infinite Privilege

American Express doesn't have card classifications, but how the card is processed can make a difference.

Card processing type

The interchange fee we mentioned earlier depends on the type of card and how it's processed. You'll be charged different rates based on whether the card was physically inserted (chip), contactless (tap), or online.

How much are credit card fees in Canada?

The interchange portion of merchant fees ranges from 0.92% to 2.4%, depending on a variety of factors. Once you add network assessment and processor markup fees on top, total processing fees usually land between 1% and 3%.

When you accept a credit card payment and get hit with credit card fees, the interchange fee goes to the bank that issued the credit card and the network. This is because the bank pays out the rewards.

The company processing the transaction also issues its own processing fees. Most companies break down these fees into tiers: standard, premium, and ultra-premium.

Standard credit cards

Let's start with standard credit cards. Mastercard defines them as "Core," and Visa calls them "Classic/Gold/Platinum":

Mastercard is cheaper for in-store purchases, while Visa offers better rates for online ones.

Premium credit cards

Next up are premium cards, which include Visa Infinite and Mastercard World cards:

Even with premium cards, Mastercard still has higher fees for processing online transactions. That said, Visa Infinite cards outshine World Mastercards in just about every area, so this isn't quite a fair comparison.

Ultra premium credit cards

The final level for both of these networks is the World Elite Mastercard and Visa Infinite Privilege:

Again, we have an unequal comparison, as World Elite Mastercards are more similar to Visa Infinite cards than VIP cards in terms of perks and benefits. Accordingly, though, World Elite Mastercards have lower fees across the board.

4 ways small businesses can reduce credit card processing fees

Small businesses often incur disproportionately high credit card processing fees because they can't match the sales volume of larger businesses. Encouraging customers to use alternative payment methods and not accepting online payments are a few ways your business can save on credit card processing fees.

Here are more details on how to reduce credit card processing fees:

• Don't accept credit cards: This is the easiest way to avoid processing fees altogether, but you risk losing customers who don't carry cash.
• Encourage customers to use cash or debit. Offering a small discount for using cash or debit could motivate your customers to opt for those payment methods instead of credit cards. Remember that if you pass any credit card fees on to customers, you are required to advise them (for example, with a sign).
• Set a minimum spending requirement for credit card payments: Put up signage notifying customers they can only use a card to make purchases over a specific amount, like $5. This is especially valuable if you have many customers making very small purchases with a card.
• Only accept Visa and Mastercard: Unless you can get in on the Amex OptBlue Wholesale Discount Rate, you might choose to avoid Amex cards. With the discount, you'll pay similar processing fees to World Elite Mastercards.
• Don't accept online payments: Online transactions cost more, potentially because online fraud levels are much higher than in-store ones. If you don't need to run an online presence, there's little sense in setting up online payments.

Since debit card fees are cheaper than credit card fees, you might think you'd only accept debit cards, but this is tricky to do in practice since you'll still need a processing system.

FAQ

What is a typical credit card processing fee?

Although the average interchange rate for eligible small businesses in Canada is around 0.95%, that's just one part of the processing fee. Visa and Mastercard usually charge around 1.4% to 2% for in-person processing fees, while Amex charges around 2% to 3%.

What are the types of credit card processing rates and fees?

Rates and fees include interchange fees, network assessment fees, processor markup fees, terminal fees, payment gateway fees, payment card industry (PCI) fees, and incidental fees. These vary by credit card network. Fees also depend on how you accept credit card payments (online, chip, tap, etc.).

How are credit card processing rates calculated?

Credit card processing rates are made up of several fees that vary by network. The final rate depends on factors like which credit card is used, the transaction amount, and how the payment is processed – whether in person, online, or over the phone.

What are the credit card processing rates and fees for Amex?

Unlike Visa and Mastercard, American Express does not publish its credit card processing rates and fees. However, we know that they are significantly higher than either of the other issuers, which is why some merchants don't accept Amex credit cards.