Cutting Costs: Your Guide to Lowering Merchant Fees in Canada


Merchant fees, also known as processing fees, are charges that businesses incur when they accept electronic payments from customers. These fees cover the costs associated with facilitating these transactions, such as payment processing, security measures, and infrastructure maintenance.

While merchant fees may seem like an inevitable expense for businesses, understanding their importance can help you navigate the world of payment processing more effectively. By comprehending how these fees impact your bottom line, you can make informed decisions to mitigate their impact and optimize your profitability.

1. Interchange fees: Exploring the basics

Interchange fees are a crucial component of merchant fees that every business owner should understand. These fees are charged by credit card companies to cover the costs associated with processing transactions.

Think of it as a fee for the convenience and security your customers enjoy when using their credit cards. Interchange fees vary depending on card type, transaction volume, and industry.

The best way to look at it is that interchange does not change from provider to provider. These rates are indicated on Visa and MasterCard’s websites. Contact us today for any questions or concerns.

2. Assessment fees: What are they and how do they affect your business?

Assessment fees can be a sneaky addition to your overall merchant fees that often go unnoticed. These charges come directly from the card networks, such as Visa or Mastercard, and are meant to cover network services like authorization and settlement processes.

Assessment fees are usually based on a percentage of your monthly sales volume or on a per-transaction basis. Although they may seem insignificant individually, when combined with other merchant fees, assessment fees can significantly impact your bottom line. 

3. Transaction Fees: Unveiling the hidden costs

Markup fees, also known as processing or service provider markup, refer to the additional charges imposed by payment processors for their services. These costs go beyond interchange and assessment fees and include expenses related to processing transactions, customer support, fraud prevention measures, account maintenance, equipment leasing (if applicable), and more.

Markup rates can vary significantly among payment processors based on factors such as contract terms and negotiation skills. As a business owner aiming to cut costs on merchant services in Canada, it’s crucial to scrutinize these markup charges carefully since they can often be negotiated or reduced by exploring different processing options. We at Vital Payments aim to get every merchant as close to true costs as possible. 

4. Factors Influencing Merchant Fees

Card type: Debit, credit, or premium?

When it comes to merchant fees, the type of card your customers use can significantly impact the amount you pay. Generally, debit cards tend to have lower interchange fees compared to credit cards.

This is because debit transactions are linked directly to a customer’s bank account and involve less risk for financial institutions. On the other hand, credit cards often come with higher interchange fees due to the additional perks and benefits they offer users.

Premium cards, such as those with travel rewards or exclusive privileges, tend to have even higher interchange fees associated with them. So, it’s important to consider the mix of card types your customers typically use and assess how they may affect your overall costs.

Industry-specific considerations

Different industries may face unique challenges when it comes to merchant fees in Canada. For example, high-risk industries such as online gambling or adult entertainment generally face higher interchange rates due to elevated fraud risks associated with their operations.

Conversely, low-risk sectors like grocery stores or gas stations might enjoy relatively lower interchange fees since their products are considered less prone to chargebacks or fraudulent activity. Understanding how your industry is categorized by payment processors can help you anticipate the potential impact on merchant fees and explore tailored cost-saving strategies. Contact us to see what your business may qualify for.

5. Dual Pricing Now Available in Canada

We understand that merchant fees associated with credit card transactions can significantly impact your business’s bottom line. That’s why we are happy to now offer a program called Dual Pricing

With Dual Pricing, you now have the ability to pass credit card fees directly to your customers, allowing them to absorb almost all credit card transaction costs. This means that when customers choose to pay with a credit card, a small fee is automatically added to the transaction amount. On the other hand, if they opt to pay with debit or cash, there’s no additional markup – giving them the freedom to select their preferred payment method without any hidden surprises. 

Before you were unable to pass credit card fees on to customers in Canada, but now the program has officially rolled out and it’s saving merchants thousands of dollars monthly. Make sure to speak with us to ensure all requirements are met to use this method within your business. 

By implementing this program correctly and transparently, you can navigate the world of merchant fees with confidence and create a win-win situation for both your business and your customers. 


As we navigate the ever-evolving landscape of merchant fees in Canada, it is crucial for businesses to stay proactive and informed about emerging trends and regulatory changes. While uncertainty might be present when contemplating the future trajectory of fees and associated costs, it also opens up opportunities for cost-saving innovations.

By keeping an eye on emerging payment technologies and engaging with reputable processors who prioritize transparency and fair pricing structures, businesses can position themselves effectively for success while mitigating unnecessary expenses. Remember that by staying adaptable and leveraging available resources like government programs or incentives mentioned earlier in this guide, you can turn challenges into growth opportunities while safeguarding your bottom line. 

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