05 Pricing
How payment processing pricing works
There’s no single processing rate that applies to every Canadian business. Here’s what actually makes up your cost, and how the two common pricing models compare.
What makes up your processing cost
Every card transaction includes an interchange fee — set by the card networks and paid to the customer’s issuing bank — plus a smaller network assessment fee, plus the markup charged by your processor. Interchange and network fees are largely non-negotiable; the processor’s markup is the part that varies most between providers, and where genuine savings usually come from.
Two common pricing models
Flat-rate pricing
Simple, predictable, often costs more at volume- One rate applied to every transaction, regardless of card type
- Easy to understand and predict
- Can cost more than interchange-plus for higher-volume or lower-margin businesses
- Common with simplified or app-based processing setups
Interchange-plus pricing
Transparent breakdown, usually more competitive at volume- Interchange fee shown separately from the processor’s markup
- Markup is typically a small, fixed percentage plus a per-transaction fee
- Statement shows exactly what the processor is charging you
- Often more competitive for established or higher-volume businesses
What affects your rate
- Your business category (some categories carry different interchange rates)
- Average transaction size and monthly volume
- Card mix — debit vs. credit, rewards and premium cards typically cost more to accept
- Card-present vs. card-not-present (online) transactions
- Contract length and any bundled equipment or monthly fees
How to know your effective rate
Your effective rate is your total monthly processing cost divided by your total card sales — the single number that reflects everything you actually paid, regardless of how the pricing was structured. It’s the most useful figure for comparing providers, and it’s usually not printed clearly on a standard statement.
Not sure what you’re paying? Send us a recent statement and we’ll calculate your effective rate and show you how it compares — free, no obligation.