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March 26, 2021
by David Goodale



The best payment processing options in Canada depending on your business type

Payment Processing Canada:

The best payment processing options in Canada depending on your business type.

There is no single processor with the lowest rates for all industries. You need to know which processors cater to your specific industry, and to businesses of your size. (Some are better at e-commerce, some are better at retail, some offer better rates to startups, others to high volume merchants, etc.).

This requires an analysis of your business, setting cost goals, and becomes a process of elimination until you've found the best processor for your situation. The "best" solution can be defined as functionally sound, commercially affordable and scalable as you grow your business.

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This is written from a Canadian-centric perspective, but the pricing logic concepts can be applied in any region.

Best E-commerce Payment Processors in Canada

E-commerce payment processing is an area where large traditional processors often fall short. Many e-commerce businesses are young and growing, sometimes with few physical assets and a lot of intangible value.

This is where a processor that is nimble and less traditional will be beneficial. Most e-com businesses are often better to stay away from large traditional banks and processors, because the slow moving banking culture can impact the risk appetite for e-commerce businesses. This can lead to you paying higher rates, or having them implement a security reserve where they retain a portion of your funds after each transaction is processed.

www.merchant-accounts.ca

Specialization: E-commerce, online invoice payments, virtual terminal (orders by phone).

Best for: Online business that want to reduce costs for CAD, USD or foreign currency processing.

In Business Since:
Founded in 2001

Specialization:
Multi-currency, e-commerce, virtual terminal, recurring, and online invoice payments.

Processing Currencies:
CAD, USD, GBP, EUR, AUD, JPY, ++ (all majors, most exotics)

Approval Requirements:
Flexible, particularly for e-commerce , travel, and hard to approve businesses. Able to support startups. Excellent appetite for high volume merchants.

Accolades:
Personal client support with direct phone number to your account manager. Able to deposit funds in foreign currencies. Wide range of gateway support and integration options.

Technical Features Supported Notes
E-commerce Yes Multiple payment gateways supported.
Virtual Terminal Yes
Online Invoice Payments Yes
Recurring Billing Yes
Data Vault Yes
POS Machine / In-Store Retail Payments Limited Small range of POS solutions
Rates & Commercial
Setup Fees None
Monthly Fees None Via starter program
Contract Term Month to month
Interchange Plus Pricing Yes Via advanced program
Currencies Supported Notes
CAD Processing Yes
USD Processing Yes Funds are deposited in USD
Foreign Currencies (GBP, EUR, etc) Yes Via advanced program
Approval Criteria Supported Notes
Approve Startups Yes
Approve High Volume Yes
Approve High Risk Yes Pendant on industry, business history and finanical strength

www.payvision.com

Specialization: Multi-region processing and alternative payments.

Best for: Large corporate merchants with offices in multiple countries.

In Business Since:
2002

Able to Board Merchants Located In:
Canada, USA, Europe, Asia/Pacific

Processing Currencies:
CAD, USD, GBP, EUR (many others, determined by region)

Approval Requirements:
Strict. Will not onboard small Canadian merchants.

Accolades:
Payvision supports a wide range of alternative payment types via their platform.

Technical Features Supported Notes
E-commerce Yes
Virtual Terminal Yes
Online Invoice Payments Yes
Recurring Billing Yes
Data Vault Yes
POS Machine / In-Store Retail Payments No No POS solutions in Canada
Rates & Commercial
Setup Fees Yes
Monthly Fees Yes
Contract Term Unknown
Interchange Plus Pricing Yes
Currencies Supported Notes
CAD Processing Yes
USD Processing Yes Funds are deposited in USD
Foreign Currencies (GBP, EUR, etc) Yes
Approval Criteria Supported Notes
Approve Startups No
Approve High Volume Yes
Approve High Risk Limited Based on industry and opportunity size

www.worldpay.com

Specialization: Very high volume foreign and cross border processing.

Best for: The very largest corporate merchants.

In Business Since:
1989

Able to Board Merchants Located In:
Canada, USA, Europe, Asia/Pacific

Processing Currencies:
CAD, USD, GBP, EUR (many others, determined by region)

Approval Requirements:
Strict. Will not onboard small Canadian merchants.

Accolades:
WorldPay, now part of FIS, is one of the worlds largest payment processors.

Technical Features Supported Notes
E-commerce Yes
Virtual Terminal Yes
Online Invoice Payments Yes
Recurring Billing Yes
Data Vault Yes
POS Machine / In-Store Retail Payments No No POS solutions in Canada
Rates & Commercial
Setup Fees Yes
Monthly Fees Yes
Contract Term Monthly and Annual
Interchange Plus Pricing Yes
Currencies Supported Notes
CAD Processing Yes
USD Processing Yes Funds are deposited in USD
Foreign Currencies (GBP, EUR, etc) Yes
Approval Criteria Supported Notes
Approve Startups No
Approve High Volume Yes
Approve High Risk Limited Based on industry and opportunity size

www.stripe.com

Specialization: E-commerce.

Best for: Small business with simple requirements looking to start quickly.

In Business Since:
2010

Able to Board Merchants Located In:
Canada, USA, UK, EU and other regions.

Processing Currencies:
All major currencies

Approval Requirements:
Limited support for high risk, high volume and complex businesses.

Accolades:
Widely supported by many shopping cart software platforms.

Technical Features Supported Notes
E-commerce Yes
Virtual Terminal Yes
Online Invoice Payments Yes
Recurring Billing Yes
Data Vault Yes
POS Machine / In-Store Retail Payments No No POS solutions in Canada
Rates & Commercial
Setup Fees No
Monthly Fees No
Contract Term Monthly
Interchange Plus Pricing No Stripe offers flat pricing that is easy to understand and reconcile, but is usually more expensive than interchange plus pricing.
Currencies Supported Notes
CAD Processing Yes
USD Processing Yes Some merchants may be charged currency conversion fees when funds are received
Foreign Currencies (GBP, EUR, etc) Yes
Approval Criteria Supported Notes
Approve Startups Yes
Approve High Volume Limited
Approve High Risk No

Best Retail / POS Payment Processors in Canada

Point of sale (POS) payments are in-person transactions like those that occur at a restaurant, a grocery store, or a gas station. There are a wide range of solutions and options out there.

The POS landscape is dominated in Canada by the old guard - that is long established payment processors with traditional banking ties. However, the space has been disrupted by Square, which focuses on making point of sale transactions easier for small businesses that do in-person sales. The large traditional processors tend to provide somewhat similar offerings and lower rates, while Square makes it easier to get started and is significantly different from the rest of the pack.

https://squareup.com/ca/en

Specialization: In-person POS transactions.

Best for: Very small brick and mortar retailers, and b2b with small trading volumes.

In Business Since:
2009

Able to Board Merchants Located In:
Canada and USA.

Processing Currencies:
CAD only (for Canadian business)

Approval Requirements:
Limited support for high risk or large businesses.

Accolades:
Square has disrupted the traditional POS payments industry by being the first to offer inexpensive devices that tether to smartphones to process in-person payments.

Rates & Commercial
Setup Fees No
Monthly Fees No
Contract Term Monthly
Interchange Plus Pricing No Square offers flat pricing that is easy to understand and reconcile, but is usually more expensive than interchange plus pricing.
Currencies Supported Notes
CAD Processing Yes
USD Processing No Not for Canadian businesses
Foreign Currencies (GBP, EUR, etc) No
Approval Criteria Supported Notes
Approve Startups Yes
Approve High Volume Limited Square does not focus on large corporate merchants
Approve High Risk Limited Square does not focus on high risk or complex accounts

www.moneris.com

Specialization: Traditional point of sale (POS) and retail.

Best for: Large brick and mortar retailers.

In Business Since:
2000

Able to Board Merchants Located In:
Canada.

Processing Currencies:
CAD and USD

Approval Requirements:
Traditional banking / somewhat rigid.

Accolades:
In 2000 Moneris was the first provider in Canada to issue both Visa and Mastercard merchant ID's together without needing to go multiple payment processors to support each card type.

Rates & Commercial
Setup Fees Yes
Monthly Fees Yes
Contract Term Unknown
Interchange Plus Pricing Yes
Approval Criteria Supported Notes
Approve Startups Limited Will approve startups that meet acceptance criteria.
Approve High Volume Yes
Approve High Risk Limited Does not focus on high risk

www.firstdata.com

Specialization: Traditional point of sale (POS) and retail solutions.

Best for: Large brick and mortar retailers.

In Business Since:
1971

Able to Board Merchants Located In:
Canada and USA

Processing Currencies:
CAD and USD

Approval Requirements:
Traditional banking / somewhat rigid.

Accolades:
First Data is one of the longest established payment processors.

Rates & Commercial
Setup Fees Yes
Monthly Fees Yes
Contract Term Unknown
Interchange Plus Pricing Yes Ask to be put on interchange plus pricing.
Approval Criteria Supported Notes
Approve Startups Limited
Approve High Volume Yes
Approve High Risk Limited Does not focus on high risk accounts

www.elavon.com

Specialization: Traditional point of sale (POS) and retail.

Best for: Retail, restaurant and in-person processing, particularly for small and mid-sized businesses.

In Business Since:
1991

Able to Board Merchants Located In:
Canada and USA

Processing Currencies:
CAD and USD

Approval Requirements:
Traditional banking / somewhat rigid.

Accolades:
Elavon has a wide range of POS solutions, the ability to support travel merchants (based on risk) and has a strong partner network.

Rates & Commercial
Setup Fees Yes
Monthly Fees Yes
Contract Term Unknown
Interchange Plus Pricing Yes Ask to be put on interchange plus pricing
Approval Criteria Supported Notes
Approve Startups Some Based on industry, credit score and other criteria
Approve High Volume Yes
Approve High Risk Limited Pendant on industry, business history and finanical strength

www.globalpaymentsinc.com

Specialization: Traditional point of sale (POS) and retail solutions.

Best for: Large brick and mortar retailers.

In Business Since:
2000

Able to Board Merchants Located In:
Canada and USA

Processing Currencies:
CAD and USD

Approval Requirements:
Traditional banking / somewhat rigid.

Accolades:
Global Payments has a strong history in traditional settings such as grocery stores, large retailers and gas stations.

Rates & Commercial
Setup Fees Yes
Monthly Fees Yes
Contract Term Unknown
Interchange Plus Pricing Limited Global may offer interchange plus pricing to some clients
Approval Criteria Supported Notes
Approve Startups Limited
Approve High Volume Yes
Approve High Risk Limited Pendant on industry, business history and finanical strength

www.chase.ca

Specialization: Traditional point of sale (POS) and retail solutions.

Best for: Large brick and mortar retailers.

In Business Since:
1985

Able to Board Merchants Located In:
Canada and USA

Processing Currencies:
CAD and USD

Approval Requirements:
Traditional banking / somewhat rigid.

Accolades:
Chase Paymentech is a large and popular provider of POS processing equipment in Canada.

Rates & Commercial
Setup Fees Yes
Monthly Fees Yes
Contract Term Unknown
Interchange Plus Pricing Yes Ask to be put on interchange plus pricing
Approval Criteria Supported Notes
Approve Startups Limited
Approve High Volume Yes
Approve High Risk Limited Pendant on industry, business history and finanical strength

Best Virtual Terminal Payment Processors in Canada

Virtual Terminal Screenshot

A virtual terminal is where you use your computer to type in and process a credit card. It's probably the simplest and easiest way of accepting credit cards. There is no hardware to purchase, it can be used by as many staff as you want, it will never break, never become outdated - and with some processors is even free to setup.

A virtual terminal is very similar to an e-commerce transaction. A virtual terminal transaction qualifies at the same interchange cost as e-commerce transactions, and so the list of recommendations for virtual terminal providers is the exact same as for e-commerce payment processors.

Best Online Invoice Payment Processors in Canada

Online invoice payments are a hybrid between e-commerce payments and virtual terminal. It's effectively the same as a virtual terminal, except the main difference is that the cardholder is typing in the credit card data. So as opposed to having a customer call you and give you their card details over the phone, instead they are going to a simple online payment page. This is not to be confused with invoicing platforms, which can be very complicated.

This is an area where Merchant-Accounts.ca has a unique solution. The online invoice payment page is free to setup, it's free to host, and it doesn't force you to change the way you operate. Just keep invoicing however you already do it, and send people the link to your payment page so that they can submit payments.

Unique challenges of payment processing in Canada.

Canada tends to differ a little bit from the USA and other regions. In Canada we have Interac, which is a special payment type that is not available in other countries. Canadian merchants also have significant currency considerations that do not apply to our U.S counterparts.


Currencies (U.S dollar processing? Think about your settlement currency!)

currency exchange list

Canadian businesses that sell online frequently take payments in U.S dollars because it reduces shopper friction (American or international customers may not be familiar with the CAD exchange rate).

Taking payment in USD is only half the battle. You need that money deposited into your bank account. But in what currency? This is a vastly overlooked consideration, and probably one of the most costly mistakes that Canadian businesses make when setting up payment processing.

Ensuring that your deposits are made in U.S dollars will save about 3% on each transaction. (Yes, that is not a typo, and that is why it's one of the most overlooked costs by Canadian businesses). This one planning step can save 50% or more in processing costs because it's such a significant expense. Settlement currencies should be one of, if not the most important topic, if your business will be processing transactions in U.S dollars. Learn how to process and receive funds in US dollars.

Payment Types in Canada

Low interchange costs Usable Online Supported Internationally
Visa Credit No Yes Yes
Mastercard Credit No Yes Yes
American Express No Yes Yes
Visa Debit Yes Yes Yes
Mastercard Debit Yes Yes Yes
Interac Yes Limited Limited

Visa, Mastercard and American Express Credit

In Canada Visa and Mastercard are the dominant payment methods, followed by AMEX. Visa and Mastercard credit cards have an interchange cost in Canada from about 1.4% to 2% on average. Highly exclusive / premium cards will cost more. American Express tends to have slightly higher costs on average when compared to Visa and Mastercard.

Interac

Interac (Canada's debit card platform) is one of the most popular payment types for in-person / retail POS transactions. The benefit of Interac for merchants is it's the least expensive way to collect a payment, other than cash. However, Interac cards cannot be used online in the same way as credit cards. There is a system called Interac Online which requires the user to login to their online banking that allows for an online purchase, but it has a very low adoption rate for e-commerce purchases.

Visa and Mastercard Debit

Visa and Mastercard debit cards have an interchange rate of 1.15% in Canada. This makes them significantly less expensive to process than credit cards, although functionally they operate the same as credit cards for merchants. There is no downside to accepting Visa or Mastercard debit cards.

Canadian Interchange: the most important cost to understand in payment processing.

When a payment is processed a cost is incurred. This cost is not predicable because the type of card used, and how it's submitted (online, in-person, etc) will impact the cost from Visa and Mastercard.

This underlying cost structure is called interchange . Knowing interchange will empower you to get the best rate when selecting a processor. Worded more simply: if you understand the interchange costs you can spot bad quotes, focus on the good ones, and negotiate aggressively and effectively to receive a better rate.

What you need to know about interchange:


Why does interchange matter?

You must know about interchange because you don't want to get a misleading quotation and end up paying more than you need to. Understanding interchange will help you evaluate which quotes are great, so-so, or too good to be true.


From a pricing perspective, what matters is how much your payment processor will mark up your processing fees above interchange. Having an understanding of interchange is critical if you hope to accomplish anything other than throwing a dart at a dartboard and hoping you hit a bullseye.


It's not actually the interchange that matters, since it's unavoidable. What matters is how much your payment processor will charge you above interchange. All processors must charge a rate above interchange or they wouldn't make money. You want to control that markup. Not all processors even mention interchange. Some charged fixed discount rates, or fluctuating rates that aren't tied to interchange. It's often hard to know what you'll actually be paying. If you understand what the underlying interchange costs are, it will help you to spot when something looks too good to be true. It's the only way to control your costs. When seeking quotes, this will help you determine which are the best ones. Otherwise you are simply throwing a dart at a dartboard and hoping you hit a bullseye.

Want to know more about interchange? Get a free interchange consultation.

If you want to better understand interchange costs this is a good time to point out that we offer a free consultation on interchange and pricing. We'll can also discuss any other questions you have, such as tips for approval, how to reduce collateral or holdbacks, etc. Request your consultation.

Risk tolerance: why some processors will charge you higher rates.

Different payment processors are better than others at supporting certain types of businesses. Let's start by pointing out that payment processors can lose money. In fact, they are exposed to losses each time a transaction is processed. If a merchant commits fraud, or if a cardholder purchases something but never received it, then under the Visa and Mastercard rules they are due to get their money back. If the merchant can't or won't return the money then the processor could possibly be on the hook. At a high level, that is the risk side of the equation for payment processors.

Payment processors that work with very high risk, care-intensive merchants charge high processing fees. They are more likely to take losses, and charge higher rates to offset this. Payment processors that work with very low-risk retail merchants would usually charge lower fees. Without going into too much detail, some payment processors are more receptive (more apt to give lower rates) to certain types of businesses. That is why at Merchant-Accounts.ca we have a strong book of sponsor banks, because we can write our merchant business where it will get better rates. We know which banks tend to like which types of accounts.

Contract terms: do longer contracts equal lower rates?

One way to get a lower rate is to commit to a loner contract term. Many processors have locked-in contracts. However, good processors will give you the choice.

The recommended best practice is not to sign onto a multi-year processing agreement unless you've had a chance to evaluate a platform, give it a thorough test, and only then consider signing a longer term contract. In exchange for doing this, the processor should be willing to lower your rate. When seeking quotes you should ask your payment processor the length of your contact term. If it's not a month-to-month agreement you should ask them to change it. If it is a month-to-month agreement you should ask them if they'd be willing to lower the rate if you sign a contract term (but only after several months and you've had a chance to try them out).

Summary

There are a wide range of processing options in Canada. In order to pick the best one for your business you need to consider how you take payments (retail, online, etc), your trading volumes, and then seek out a processor that is good at supporting that type of business. Makes sure your costs are tied to interchange, and that you are not stuck in a long-term agreement. With these steps, you should be able to find an excellent solution for your business.


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David Goodale About the Author

My name is David Goodale, CEO at Merchant Accounts.ca. I launched our business in 2001 and have over 20 years of expertise in the field of online payments. If you have a payments related question or project, and especially if it relates to multi-currency or international e-commerce don't hesitate to contact me. I'm always happy to help with an honest opinion, and enjoy chatting with folks from interesting businesses.

Toll free: 888-414-7111 ext. 5
Direct: (905) 901-2254
david.goodale@merchant-accounts.ca

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