11 Nov Understanding Payment Processing Fees: What Every Business Should Know Before 2030
About the Industry: The Shift Toward Electronic Payments
Canada’s payment landscape is changing rapidly. By 2030, it’s expected that 70% of all payments will be electronic, driven by consumer preference for debit, credit, and contactless options.
While electronic payments make transactions easier and faster, they come at a cost that many businesses don’t fully understand. Depending on your processor and setup, fees can range from 1% to 5% of your total sales volume. Over the course of a year, that’s thousands, or even hundreds of thousands, of dollars leaving your business unnecessarily.
Where Your Money Really Goes
Every time your customer pays with a card, your business pays a mix of three main fees:
- Interchange Fees – These make up the largest share and are paid to the card-issuing banks (like RBC, TD, or Scotiabank).
- Network or Assessment Fees – Paid to the payment networks themselves: Visa, Mastercard, and Interac.
- Processor Fees – Charged by the company that handles your payments, covering service costs, markups, and a long list of miscellaneous charges.
While the first two categories are set by banks and networks, the third (processor fees) is where most of the confusion (and overcharging) happens.
Processors control hundreds of additional fees with names that vary from one provider to another. Some are based on a percentage of sales, others on per-transaction costs, and still others on so-called “service” or “security” charges. Many are poorly explained or buried in your statement.
That’s where Fee Advocates comes in, decoding these costs and identifying where you’re paying too much.
You Have Rights: The Code of Conduct
Canada has a Code of Conduct for the Credit and Debit Card Industry, which sets out fair practices for how processors and networks must deal with merchants.
Unfortunately, many small businesses aren’t aware of their rights—or the fact that they can challenge unfair fees, misleading terms, or rate changes.
Fee Advocates has not only helped clients exercise their rights under the Code, but has also been in direct discussions with the Financial Consumer Agency of Canada (FCAC) to advocate for improvements to better protect business owners.
POS & Reservation Systems: Convenience with Caveats
Point-of-Sale (POS) and reservation systems are becoming increasingly popular, especially for restaurants, retail, and hospitality. These tools combine sales tracking, payment processing, and inventory management, but they can come with hidden costs and integration traps.
We’ve seen systems that:
- Limit your choice of processor, forcing higher rates
- Add unexpected “integration” or “gateway” fees
- Fail to deliver on promised compatibility
In some cases, these extra fees can climb into the tens of thousands annually.
Real Results for Real Businesses
At Fee Advocates, our work is grounded in measurable results—not vague promises. Here are a few recent examples:
💡 Local business with three outlets
After reviewing their statements, we helped reduce their processing fees by over 60%, saving them $105,000 in one year, without changing how they operate.
💡 Multi-location client flagged by their accountant
Their accountant thought there was an accounting error due to the sharp drop in bank fees. There was no mistake, their processing costs dropped by 55% after our review.
💡 Reservation system integration gone wrong
A Canadian client with multiple accounts was told integration would require an “additional fee.” Upon investigation, we discovered it was a recurring charge that would have accumulated to $39,000 per month by year-end. We’re now guiding them toward a fair, fully transparent alternative.
The Bottom Line
The payment industry is full of complexity, but you don’t have to face it alone.
As more payments move online and contactless, understanding where your money goes is no longer optional, it’s essential to protecting your margins.
At Fee Advocates, we work independently of processors and banks to give you a clear picture of your costs, identify overcharges, and negotiate savings directly on your behalf.
Contact us today for a complimentary review of your fees… and keep more of what you earn.