In December 2023, Visa and Mastercard announced an agreement to lower certain credit card interchange fees for qualifying small businesses in Canada.
Along with card network scheme fees, interchange fees are one of the primary expenses incurred by Stripe for processing credit cards. They vary based on more than 50 factors such as type of card, transaction type, and industry, and can increase and decrease multiple times a year.
Stripe offers businesses two pricing structures: standard pricing (under which businesses sign up for a flat rate for processing and other services, regardless of each increase or decrease in underlying processing costs) or interchange plus pricing (under which cost changes are passed through to businesses).
Over recent years, Stripe’s flat rate standard pricing has generally shielded businesses from processing costs that have increased overall. In the last year alone, Stripe's costs for credit card processing in Canada for businesses on standard pricing increased by 0.036% (or 3.6 bps), primarily due to the recent reintroduction of GST/ HST taxes for certain card network scheme fees. (As a point of comparison, the lower interchange fees for small businesses equate to a reduction of approximately 0.02%, or 2 bps, when averaged across Canadian businesses on Stripe’s standard pricing.)
Whether or not Stripe users have experienced these cost changes depends on which pricing structure that business signed up for: flat rate standard pricing, or varying interchange plus pricing.
Businesses that chose the flat rate standard pricing model listed on our website receive a simple, predictable, and consistent payment processing price. This price abstracts away the complexity of underlying network costs (which include hundreds of network fees that can change multiple times a year) and may be more suitable for many small businesses. Standard pricing also shields businesses from potential increases, as we seek to keep our standard price fairly consistent over time.
In addition to card processing, our standard pricing model includes a set of other services that combat fraud and increase businesses’ revenue, such as Stripe Radar, Adaptive Acceptance, Network Tokens, 3D Secure authentication and Card Account Updater.
For Canadian businesses, despite fluctuations in costs, Stripe’s standard pricing for domestic card payments hasn't changed in over 8 years (since 2016).
Although costs have increased in aggregate (3.6bps in increased costs minus the 2 bps decrease) our standard price will remain the same, and you will continue to benefit from all Stripe products embedded in this price model. What is interchange plus (IC+) pricing? The IC+ model breaks down costs into two parts: network costs (including interchange) and the payment processor’s fee. It allows businesses to see a very granular breakdown of their network costs and take actions to optimize specific fees. IC+ pricing is a more complex pricing model for many businesses to manage and can be difficult to optimize because of the variability in network costs, and the final total costs can be unpredictable.
IC+ pricing tends to provide a high degree of transparency into network cost and fee line items. This pricing model is best suited for businesses with a deep understanding of payment fees and staff that can sift through the complexity of hundreds of fee line items and optimize their payment integrations to lower cost.
Under an IC+ pricing model, changes to network costs are passed on to you. If you are an eligible small business, the recent decrease in certain domestic interchange fees for Visa and Mastercard will be passed on to you, effective October 19, 2024. Note that per the IC+ pricing model, other network costs have also been attributed to you, and your aggregate costs may still have increased over time. Refer to the network cost updates page for more details (you’ll need to log into your Stripe account for access).
Visa and Mastercard determine small business eligibility based on the annual transaction amount with each card network, in addition to other criteria. The annual transaction amounts are CAD $175,000 or below for Mastercard and CAD $300,000 or below for Visa, from Apr 1, 2023 to Mar 31, 2024.
If you only process with Stripe, you can see your annual transaction amount in your Dashboard:
There are no changes to Stripe fees for you or your connected accounts.
Starting October 19, 2024, Visa and Mastercard are decreasing certain domestic-only interchange fees Stripe pays for limited transactions processed by qualifying small businesses in Canada. Changes include reducing:
This support page provides you with more details on the email or dashboard notice we sent to Canadian businesses. That notice is a legal notice sent to Stripe users, even those who have unsubscribed from optional marketing notices. You cannot unsubscribe from legal notices, but if you’d prefer not to receive any further legal notices from Stripe, you can close your account by following these steps.