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Businesses rely on accepting credit card payments to make sales and earn profits. However, these transactions come with built-in payment processing fees that are charged to merchants to facilitate the transactions. With debit, credit and increasingly digital wallets being preferred payments for many Canadians, understanding the transaction cost structure can help you choose the most cost-effective payment processing solution for your business.
Here are the different types of payment processing costs your business might encounter:
Transaction fees are at the core of payment processing costs. These fees are charged for each transaction processed through a payment processor or merchant services provider. The exact amount varies based on factors such as the type of transaction (credit card, debit card, online), the payment method used, the volume of transactions, and the pricing structure set by the payment processor.
Interchange fees are set by credit card associations (Visa, Mastercard, etc.) and are paid by the merchant's bank to the cardholder's bank for processing transactions. These fees are typically a percentage of the transaction value plus a flat fee. The specific interchange rates vary based on factors such as the type of card (debit, credit, rewards), the transaction type (in-person, online), and the industry.
In addition to transaction fees, some payment processors may charge monthly fees for their services. These fees can include account maintenance fees, statement fees, or subscription fees for additional services such as fraud protection or offering advanced reporting features.
If you require physical payment terminals or equipment to process transactions, there may be costs associated with acquiring or leasing them. These costs can include purchase fees, rental fees, or setup fees.
Many payment processors offer customized pricing plans to businesses based on transaction volume, business size, industry, or specific requirements. Engaging in discussions with payment processors and negotiating custom pricing options can often lead to more favourable rates and cost savings for your business.
Moneris offers competitive payment processing costs based on two pricing models, depending on the size of your business.
Designed for fast-growing start-ups or small businesses looking for an all-in-one solution at an affordable, fixed monthly rate. Rates are based on a defined percentage and flat rate fee per transaction, so you know exactly what to expect from your payment processing costs. Learn more about Flat Rate pricing here.
Built for businesses processing large volumes, Simplified pricing allows you to customize your fee structure to find the perfect custom payment processing solution for your business.
It is based on three primary costs:
Note: Effective October 19th, 2024, transactions submitted for clearing and settlement October 18, 2024, will be subject to new interchange rates. Visa and Mastercard will introduce a small merchant interchange rate program that will offer lower rates for domestic consumer credit transactions. To learn more about these interchange rates click here.
Let’s look at how this graphic translates into real-world numbers. Here’s an example of a $100 transaction using a basic (entry-level) Visa card*:
Visa Interchange rate: 1.62% ($1.62)
Visa Assessment fee: 0.10% ($0.10)
Moneris Transaction fee: 0.40% ($0.40)
The total processing cost of a $100.00 transaction would be $1.91, which means the business would get $98.09 after processing fees.
To learn more about Simplified Pricing and Moneris fees, click here.
The information in this article is provided solely for informational purposes and is not intended to be legal, business or other professional advice or an endorsement of any of the websites or services listed. VISA is a trademark owned by Visa International Service Association and used under license. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated. DISCOVER is a registered trademark of Discover Financial Services.
1The foregoing is an overview of the simplified pricing structure that applies to the processing of credit and debit card transactions. Other fees may apply depending on the services received from Moneris. Please review your Moneris Merchant Agreement for details.
*All rates are dependent on the type of card used. The example shown is for demonstration purposes and does not denote actual rates. Actual rates will vary depending on the merchant agreement and the type of card used.
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