Interac fees for merchants: flat fee vs percentage in Canada

Debit is different in Canada — the network charges flat cents, not a percentage

Credit and debit are priced on completely different logic in Canada, and most merchants are never told this. When a customer pays with a credit card, part of your cost genuinely is a percentage — credit interchange scales with the sale amount. But when a customer pays with their bank card in store, the payment routes over the Interac network, and Interac's costs are flat cents per transaction, full stop.

Don't take our word for it. Interac says it plainly on its own merchant pages: "There are no percentage-based rates, no unexpected expenses... merchants pay a flat fee for each transaction". And debit is not a niche payment method — Canadians completed more than 6.5 billion Interac Debit transactions in 2023.

So here is the one-sentence version of this whole article: because the underlying cost of Interac debit is flat, a flat per-transaction fee is the honest way to price it — and a percentage on debit is a structure worth questioning.

What an Interac transaction actually costs behind the scenes

Two flat charges make up the wholesale cost of an Interac debit transaction, and both are public.

• The Interac switch fee. Interac Corp. charges acquirers and issuing banks a wholesale $0.013985 per transaction — under a cent and a half — rising to $0.014438 on November 1, 2026. Interac describes it as "a wholesale, flat-rate fee... set on a cost recovery basis," and it is the only fee Interac itself charges.
• Interchange. A standard chip-and-PIN insert carries $0.00 interchange. Contactless transactions carry flat-cent interchange tiered by merchant type: $0.020, $0.025 or $0.035 depending on the tier, and a flat $0.055 for sales between $100.01 and $250.00. No tier is a percentage.

Add it up and the network layer costs roughly a cent and a half to seven cents, all-in, on any in-store debit sale — whether the customer is buying a $4 coffee or a $240 balayage.

Everything above that is your processor. Interac is explicit that the fee you actually pay is set by your acquirer, not by the network, and Interac doesn't publish a retail merchant price. Industry benchmarks suggest Canadian merchants typically pay a flat $0.02–$0.10 per Interac transaction plus a small markup, which is why Interac is often described as roughly 8–15x cheaper than credit cards. The structure of what you pay — flat cents versus a percentage — is entirely your processor's choice.

The red flag: a percentage on your debit

Percentage pricing on Interac is the clearest example of a markup that doesn't mirror the cost underneath it. The prominent example: as of July 2026, Square charges 0.75% + $0.07 per Interac transaction — contactless, inserted or swiped — alongside its 2.5% in-person credit rate. It wasn't always this way. Square's Canadian Interac pricing was a flat 10 cents until it moved to 0.75% + 7¢ in 2023, citing fee increases and the need to invest in its platform.

Compare that with the flat pricing published elsewhere, also as of July 2026: Stripe Terminal charges a flat CA$0.15 per Interac transaction, and Moneris's flat-rate plan charges $0.12 per in-person Interac transaction.

Two honest caveats. First, percentage pricing looks harmless — even favourable — on very small tickets, and Square can genuinely suit very low-volume sellers; we've written a fair comparison in Square fees in Canada vs. an independent processor: honest math. Second, a percentage on debit doesn't break any rule. Canada's Code of Conduct governs disclosure and cancellation rights, not price structure. It's a red flag in the plain sense: the cost underneath is flat, so a percentage means your fee grows with every larger sale while the processor's cost barely moves.

Run the numbers: a $4 coffee vs a $100 sale vs a $250 sale

Because the rates above are published, we can just multiply. Here's the same in-store Interac sale under each published structure (illustrative math from published rates, not a quote):

There's no crossover to hunt for with Newdays. Square's fee starts at its $0.07 fixed component before the 0.75% is even added, so it already tops Newdays' flat 5.9¢ contactless fee on the $4 coffee ($0.10 versus $0.059 — and just $0.039 on a chip insert) and pulls further ahead on every larger sale. The higher flat prices published elsewhere do have a crossover — Moneris's $0.12 overtakes the percentage above about $6.67 a sale, Stripe's $0.15 above about $10.67 — but Newdays' flat cents (from 3.9¢ on a chip insert to 5.9¢ on a tap) beat it from the very first cent. That's the quiet trick of percentage pricing on debit: it looks like dimes at the coffee counter and compounds silently everywhere else.

Scale it to a month. A nail salon in North York running 500 debit transactions averaging $60 pays $29.50/month at a flat 5.9¢ contactless rate (just $19.50 at the 3.9¢ chip rate) — and about $260/month at 0.75% + 7¢. That's roughly $2,800 a year of difference on debit alone, for identical transactions on the same debit machine.

What a fair flat Interac fee looks like in 2026

A fair Interac price in 2026 is a flat fee measured in cents — never a percentage. The published retail flat rates above cluster at $0.12–$0.15, the wholesale network cost underneath is a cent and a half to seven cents, and a lean independent can price between the two.

Newdays charges a flat per-transaction fee — never a percentage — that depends on the device and how the card is read: from 3.9¢ on a Clover chip insert to 5.9¢ on a Clover contactless tap, with PAX terminals at a flat 5.5¢ either way. All of it is flat cents, alongside a 1.5% credit rate on Visa and Mastercard, with volume pricing available for high-volume merchants. We're an independent processor serving the Greater Toronto Area, so yes, we have a stake in this argument. But the arithmetic is exactly what the sections above imply: the network takes its cent-and-a-half to seven cents, and a flat 3.9–5.9 cents sits right alongside that wholesale cost rather than ballooning above it — on a chip insert, where interchange is zero, 3.9¢ is a lean, honest markup; on the largest contactless tickets even 5.9¢ barely clears the network's own cost, and it still sits at the low end of the typical 5–15¢ flat range processors charge. We'd rather you know that than wonder. What we won't do is take a percentage of a payment type whose cost doesn't scale.

If your statement shows a percentage next to "Interac," "debit" or "POS," it's worth reading the rest of the lines too — percentage debit tends to travel with the other padding we cover in Credit card processing fees in Canada: junk fees explained.

Your rights under the Code of Conduct

Canada's revised Code of Conduct for the Payment Card Industry took effect October 30, 2024, and it strengthens exactly the disclosure this article depends on: merchant agreements must include a cover page summarizing key terms, with cost-per-transaction disclosure, and the FCAC oversees complaints under the Code.

Two rights are worth memorizing. Processors must give you 30–60 calendar days' notice before a fee increase takes effect (as of April 30, 2025), and you can cancel your agreement without penalty within 70 calendar days after the effective date of a fee increase or a new fee — increases on a schedule already fixed in your contract are the exception. In practical terms: if moving your debit pricing from flat to a percentage raises what you pay, that's a fee increase — and the 30–60-day notice and the penalty-free cancellation window attach. If you need to act on it, How to switch payment processors in Canada without downtime walks through the process step by step.

Why does my processor charge a percentage on debit?

Because the structure is theirs to choose, and a percentage is easier to blend into a single "card rate" that sounds simple. Some processors fold debit and credit into one quoted percentage; some price debit as a percentage outright. It's legal and it's disclosed — but it isn't cost-based, since the Interac network charges flat cents. If you're quoted one blended rate "for all cards," ask what your debit transactions specifically cost. On honest flat pricing, the answer is a number in cents.

Are debit machine fees separate from Interac transaction fees?

Yes. The debit machine (terminal) is billed separately from per-transaction fees, usually as a monthly rental. At Newdays, terminals start at $25/month — the PAX A80 is $25/mo, the PAX A920 Pro is $25/mo, the Clover Flex is $30/mo, and the Clover Mini is $60/mo (two Clover Minis for $60/mo with a $20 cable) — and you can see the full Clover and PAX terminal lineup. When comparing providers, add the monthly terminal cost and the per-transaction fees together: a cheap machine with percentage debit can cost far more than a mid-priced machine with flat debit.

Why does online debit cost more than in-store Interac?

Because online, it usually isn't Interac — or isn't only Interac. In-store debit routes over the domestic Interac rails at flat-cent cost, while online and international debit purchases typically ride Visa Debit or Debit Mastercard rails, which carry interchange on top. You can see the gap in Moneris's published flat-rate pricing as of July 2026: $0.12 for an in-person Interac transaction versus $1.00 for a card-not-present debit transaction. If you sell mostly in person, in-store Interac at a flat fee remains the cheapest card payment you can accept in Canada.

Not sure what you're actually paying on debit? Pull one recent statement and find the Interac line — or let us do it: upload your statement for a free, line-by-line audit, no obligation, and we'll show you the per-transaction math in plain numbers. For reference, Newdays' standard rates are a 1.5% credit rate on Visa and Mastercard (1.8% on American Express) and a flat Interac fee from 3.9¢ (chip) to 5.9¢ (contactless tap) — standard for every business, with volume pricing available for high-volume merchants.