Merchant surcharges, service and convenience fees, and discounts

Surcharges

A surcharge is a fee that a merchant may add to a transaction when a consumer pays by credit or debit card.

Surcharges for credit card payments

As a merchant, you have the option of adding a surcharge to a credit card transaction (except in Quebec). Some payment card network operators (PCNOs) forbid surcharging for prepaid cards.

PCNOs also have different surcharging requirements, such as:

• providing your acquirer and/or your payment card network with advance written notice of your intention to surcharge
• not applying a surcharge that is:
  • higher than your actual cost to accept the credit card
  • higher than 2.4%
  • in addition to a service or convenience fee
• displaying information on surcharges at
  • the point of sale, both in store and online
  • the entrance of physical stores
  • on every receipt

Merchants have the option of surcharging at the brand level or the product level for a specific PCNO’s credit card. If a merchant decides to surcharge at the brand level, the surcharge must be the same across all credit cards for that specific payment card network.

If a merchant decides to surcharge at the product level, the surcharge amount may differ between categories of credit card. For example, standard vs premium card.

Certain PCNOs do not allow merchants to surcharge more for their credit cards than for other PCNOs’ credit cards.

Merchants should consult with their acquirer regarding these rules.

Surcharges for debit card payments

Merchants should contact their acquirer about their ability to surcharge for accepting debit card payments. Some networks do not permit merchants to surcharge for debit card payments.

Service and convenience fees

Certain PCNO rules permit eligible merchants to charge a service or convenience fee for certain types of transactions. Terminology may vary by PCNO. A merchant can verify with their acquirer if they're eligible or not. Merchants who choose to charge those fees for credit or debit payments are not allowed to surcharge.

Disclosure of surcharges and fees

Merchants must clearly disclose surcharges and fees to cardholders before a transaction is completed. Cardholders must be able to cancel the transaction without penalty before authorizing payment or pay with an alternative form of payment, for example debit or cash.

Discounts

Under the Code of Conduct for the Credit and Debit Card Industry in Canada, merchants may choose to offer discounts for different payment methods and between different payment card networks.

If merchants choose to offer these types of discounts, they must clearly display the discounts at the point of sale.

Learn more about the Code of Conduct for the Credit and Debit Card Industry in Canada.

For more information on eligible types of transactions, visit the payment card network operators’ web sites:

• Visa
• Mastercard
• American Express
• Discover
• UnionPay
• Interac
• THE EXCHANGE

Learn how to file a complaint with a payment card network operator.