What does card on file mean?
Card on file means a customer’s card is saved by a business so it can be charged later, without the card being there. Visa’s rules call it a Stored Credential. A recurring payment charges that stored card on a fixed schedule, such as monthly.
Square describes its Card on File feature this way: “you can securely add and store payment cards in your Customer Directory.” Square says it handles “the PCI compliance and authorization” when its tools store the card. PCI is the card industry’s data security standard. Square’s article also says “It’s a violation of PCI standards to record a customer’s CVV,” the three- or four-digit security code.
What Visa’s rules require before a card is stored
Visa’s Core Rules (edition of 18 April 2026) say that before storing a card for future use, a merchant must obtain “the Cardholder’s express informed consent to an agreement.” The agreement includes:
- a description of the goods or services and the total price
- cancellation and refund policies
- the business’s location and contact details
- the last four digits of the card that will be charged
- how the stored card will be used, and the timing and frequency of charges
- the length of any trial period, introductory offer or promotional period
Visa’s rules add that a recurring charge “must not include any finance charges, interest, or imputed interest.”
Before the first charge, Visa’s rules say the merchant either submits an authorization for the amount or, if no payment is due yet, an account verification: a zero-dollar check that the card is valid.
Recurring payments: cancelling and trial periods
For recurring charges, Visa’s rules require the merchant to:
- “Provide a simple cancellation procedure, and, if the Cardholder’s order was initially accepted online, at least an online cancellation procedure.”
- Include “the fixed dates or intervals on which the Transactions will be processed.”
- Notify the cardholder at least 7 days before a recurring charge if “a trial period, introductory offer, or promotional period is going to end.” The notice includes the amount, the date and “a link or other simple mechanism to enable the Cardholder to easily cancel Transactions online or via SMS/text message.”
What it costs: published rates
Card-on-file and recurring charges are card-not-present sales: the card is not at the counter. Providers usually price them like online or keyed sales.
| Provider | Card on file or recurring | In person, for comparison |
|---|---|---|
| Square Canada | 3.3% + 15¢ (“When you manually key in your customer’s card details or use a card on file”) | 2.5% credit; 0.75% + 7¢ debit |
| Helcim (Tier 1) | Margin 0.50% + 25¢ “for card-not-present and recurring transactions”; Visa consumer combined recurring rate 1.85% + 25¢ | Margin 0.40% + 8¢; Visa consumer combined 1.75% + 8¢ |
| Stripe Canada | 2.9% + CA$0.30 for domestic cards online; +0.5% for manually entered cards | 2.7% + CA$0.05 for most cards |
Square lists a separate rate, 2.8% + 30¢, when a customer “pays an invoice online.” Prices for Stripe’s subscription billing tools were not on the pages we read.
How providers handle the details
Consent records. Square’s help article says written authorization from the customer is needed to save a card, and provides an authorization form. Stripe’s documentation says that to charge a customer who is not present, the business’s terms include “The customer’s agreement to your initiating a payment or a series of payments on their behalf,” and that a record of that written agreement is kept.
Declined payments. Square says: “Square will not automatically attempt to re-process declined payments. If a recurring invoice payment is declined, we will notify your customer immediately.” For invoices, Square says that if a card on file fails, “a new invoice will be sent allowing the customer to enter new card information.”
Timing. Square says scheduled card-on-file charges run “at 10:00 a.m. in your local time zone” on the chosen date.
Expired cards. Square says that once a card on file expires, it has to be unlinked from the customer’s profile.
Where to go from here
More on online and keyed sales: Per-Transaction Fees and Card Processing for Online Stores. More on disputes: Chargebacks. Monthly donations are covered in Card Processing for Charities and Non-Profits.
Want a partner to review your statement? We will put you in touch. Start the free statement review.