Finder is committed to editorial independence. While we receive compensation when you click links to partners, they do not influence our content.
Credit card surcharges fees in Canada
Credit card surcharge fees can now legally be charged in Canada, but there are limits.
You’re paying at the counter with your credit card. The merchant says, “Credit card transactions come with an extra charge.” What’s that all about? Depending on the reason, this extra charge could be a service fee or a surcharge. Though it’s annoying and can add on to the cost of your purchase, there’s a reason merchants add it: to cover credit or debit card processing costs.
Let’s take a look at the difference between service fees and surcharges below, plus find out if and when merchants can charge them.
Is it legal to charge customers for credit card fees in Canada?
Yes, as of October 6, 2022, it is legal to charge customers for credit card fees in Canada. Merchants can now charge customers to cover the credit card fees that card issuers, like Visa and Mastercard, charge merchants to process purchases.
What are credit card surcharge fees?
Credit card surcharge fees are an extra cost that credit car companies, like Visa and Mastercard, charge merchants every time they process a credit card payment. These fees can run anywhere from 1% to 3%. In the past, merchants absorbed that cost as an extra business expense. However, as a result of a recent class action lawsuit against Visa, Mastercard and several banks, merchants can now directly charge customers that surcharge fee, so they no longer have to soak up the cost themselves.
How do credit card surcharge fees work in Canada?
There are certain restrictions on how Canadian merchants can charge credit fees to customers. As of now, merchants must follow these guidelines when charging credit card surcharges fees in Canada:
- The credit card surcharge must be cannot be higher than 2.4%
- Merchants cannot charge surcharge fees in addition to service or convenience fees
- Merchants cannot charge more for a surcharge fee than it costs them to accept the card
Additionally, merchants must clearly show that they are charging a credit card surcharge fee at the point of sale, in store, online, at the entrance of physical stores and on every receipt
Can merchants charge different surcharge fees for different cards?
Merchants in Canada can choose to set surcharge fees based either on the credit card’s brand or on the type of card (e.g. standard vs. premium card), but they can’t charge different fees based on brand and card type.
That means that a store could choose to charge a different surcharge fee for all Visa cards compared to all Mastercard cards. The other option is for a store to charge a different surcharge fee for all premium cards compared to standard cards, regardless of the credit card company the card comes from.
Compare credit cards
Frequently asked questions about credit card surcharge fees
More guides on Finder
-
Rogers Connections Mastercard review
The Rogers Connections Mastercard is a low-fee Mastercard that’s best suited for Rogers customers and those who regularly shop or travel in the US.
-
RBC ION+ Visa review
Th low fee RBC ION+ Visa lets you earn 3X rewards for everyday purchases and streaming subscriptions, groceries and transportation.
-
RBC ION Visa review
The fee-free RBC ION Visa lets you earn rewards for everyday purchases and streaming subscriptions, groceries and transportation.
-
RBC Cathay Pacific Visa Platinum card review
Earn Asia Miles for every purchase you make and get 40,000 bonus miles when you sign up.
-
Float card review
Earn cashback, pay no FX fees and track your receipts and spending all in one place with the innovative Float business card.
-
Jeeves credit card review
Earn up to 4% cashback, pay no foreign transaction fees and get online rebates with this multi-currency business card.
-
HSBC Travel Rewards Mastercard Review
Get a decent array of travel insurance and earn accelerated rewards for travel purchases with this fee-free credit card.
-
HSBC Cash Rewards Mastercard review
Get a generous welcome bonus and earn accelerated cashback when you shop online with this fee-free credit card.
-
Walmart Rewards World Mastercard Review
Earn Walmart Rewards Dollars and get a decent welcome bonus when you sign up for this fee-free card.
-
Neo Card with Credit Builder review
Start rebuilding your credit score and earn cashback when you spend with this secured credit card.