Debit card service fees

Using either a debit or a credit card can result in a service fee – but most merchants can't legally charge them in Canada.


While service fees (also sometimes referred to as convenience fees) can apply to both debit and credit card transactions, they are rarely charged in Canada. This is because card providers such as Visa, Mastercard and Amex typically don’t allow merchants to add an additional charge, which is meant to cover the costs a merchant incurs for processing your payment. Only a few eligible merchants can legally charge this fee on certain types of transactions in Canada, and to do so, they will need to notify you of the fee before adding it to your payment.

What are service fees or “convenience fees”?

Whenever you buy goods or services using a debit, credit or prepaid card, the merchant will incur its own bank costs for processing that payment. Since service fees can’t be charged by most merchants in Canada, some merchants will cover processing costs by charging a higher price for their goods or services. Meanwhile, eligible merchants are allowed to cover the costs by imposing a service fee, or convenience fee, on card-based transactions. This may apply to either debit or credit card transactions.

When are service fees allowed to be charged?

Merchants or ATM operators can charge a service fee if:

  • They are an eligible merchant or are processing an eligible transaction. Each card provider has its own rules regarding which types of merchants or transactions can charge service fees. For example, Visa allows real estate agents, post-secondary institutions, childcare businesses and utilities companies (among several other types of businesses) to impose a fee for cardless transactions. This fee is capped at around 1.5%, depending on whether debit or credit is used. Rules vary between providers, so visit your card provider’s website for more information.
  • You’re notified of the fee before you enter your PIN and confirm the charge.
  • They give you the opportunity to cancel your transaction at no cost if you choose to do so.

Remember that most merchants in Canada cannot legally charge a service fee unless they are considered “eligible” under the card provider’s rules.

How do I report a merchant that is improperly charging a service fee?

If you believe a merchant is charging a service fee in violation of a card provider’s rules, contact the card provider directly or reach out to your provincial or territorial consumer affairs office to file a report.

How do I avoid paying a service fee?

If you come across an eligible merchant who can legally charge a service fee, you can avoid paying the fee by:

  • Using a different means of payment: merchants may avoid incurring a fee by accepting alternative forms of payment such as cash or cheque.
  • Visiting a merchant or an ATM operator who doesn’t charge a service fee.

What about if I use payWave or Tap & Go®?

If you use the tap & go feature on your debit card, you may still face a service fee when paying for a product or service at an eligible merchant. They will need to inform you of the charge before you make your payment.

If an eligible merchant charges a service fee for the use of credit cards only, and you make a tap & go payment with your debit card, you may still face a service fee. This is due to the fact that tap & go transactions, or contactless payments such as Visa’s payWave or MasterCard’s Tap & Go®, are processed through the same system used for credit card transactions – so even if you tap & go using your debit card, you may be hit with a credit card service fee.

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