The models in one paragraph each
Flat rate. You pay one rate for each type of sale, whatever card the customer uses. Square Canada’s pricing page puts it this way: “You pay the same base rate for every credit card.”
Interchange plus. You pay the card’s real wholesale cost, called interchange, plus a markup your processor sets. The two parts are shown separately. Helcim describes its pricing as passing on “the true wholesale cost for each transaction” and adding “our set margin on top”.
Tiered. Your processor sorts each sale into a bucket. Each bucket has its own rate. Helcim’s guide describes the usual buckets as a lower “qualified” rate and higher “mid” and “non-qualified” rates.
Differential (Canada). You pay a base rate on every card. On card types that cost more at wholesale, you also pay an extra charge. TD calls this the discount rate adjustment fee, or DRAF.
Flat rate: one rate that covers everything, combined. Interchange plus: three parts shown separately, namely interchange, network fees and the processor's markup. Tiered: sales are sorted into three buckets, qualified, mid-qualified and non-qualified, and each bucket has its own rate.
Flat rate: one rate for every sale
Here is what one flat-rate price list looks like. These are Square Canada’s published rates, as listed on the day we checked:
| Type of sale | Rate |
|---|---|
| Credit card, in person | 2.5% |
| Online (card not present) | 2.8% + 30¢ |
| Debit card, in person | 0.75% + 7¢ |
| Keyed in by hand | 3.3% + 15¢ |
| Cards issued outside Canada | An extra 1.5% |
How it behaves: a basic card and a premium rewards card cost you the same rate. You always know the rate before you take the sale.
What to watch: flat rate is not always one number. TD’s sample flat-rate statement shows a base rate per brand, plus an extra “non-electronic standard rate” on some sales. On its sample, that extra is 0.20% plus $0.15 a sale.
Interchange plus: wholesale cost and markup shown separately
Here is one published markup list. Helcim’s pricing page lists these markups on top of interchange, based on monthly card volume. The page does not say which currency the volume bands are in.
| Monthly card volume | In person | Keyed and online |
|---|---|---|
| $0 to $50K | Interchange + 0.40% + 8¢ | Interchange + 0.50% + 25¢ |
| $50K to $100K | Interchange + 0.35% + 7¢ | Interchange + 0.45% + 20¢ |
| $100K to $500K | Interchange + 0.25% + 7¢ | Interchange + 0.35% + 20¢ |
| $500K to $1M | Interchange + 0.20% + 6¢ | Interchange + 0.25% + 15¢ |
| $1M to $5M | Interchange + 0.15% + 6¢ | Interchange + 0.15% + 15¢ |
How it behaves: a basic card costs you less than a premium card, because its interchange is lower. Your total changes month to month with your card mix.
What to watch: the statement is longer, and monthly fees can sit on top. TD’s sample interchange plus statement lists each card type with its own interchange rate, and then a separate TD rate per brand. Our full guide is What Is Interchange Plus Pricing?
Tiered: how sales are sorted into buckets
On tiered pricing, each sale lands in a bucket. Helcim’s guide names the usual three:
- Qualified: the low rate.
- Mid-qualified: a higher rate.
- Non-qualified: the highest of the three.
Helcim’s guide says the low qualified rate “usually only applies to very select few types of cards,” and that processors often do not clearly explain how sales are sorted. Helcim sells interchange plus, so this is one provider’s view of another model.
What to ask for: the list of which cards and which kinds of sale go in each bucket, in writing.
More on the buckets, and how Canada’s differential model compares: Tiered Pricing Explained.
The Canadian differential model
TD’s sample statements show how this works.
Each card brand has an applicable rate. On TD’s April 2026 rate sheet for its Emerging program, it is 0.92% for Mastercard. Card types with a higher interchange get a differential: the gap between their interchange and the applicable rate. A Mastercard World card in person has an interchange of 1.22%, so its differential is 0.30%.
TD’s guide explains the extra charge. It is called the discount rate adjustment fee. It is the interchange differential plus a rate adjustment fee, multiplied by the sales amount. It only applies on card types where the differential is more than zero.
Helcim’s guide says this model is common among Canadian processors.
How each model behaves at different sale sizes
Here is the arithmetic for three in-person sales on a basic Visa credit card. The inputs come from the published rates above:
- Flat: 2.5% (Square Canada, in person).
- Interchange plus: 1.25% Visa Canada interchange for a Classic card in person, plus a 0.40% + 8¢ markup (Helcim, lowest volume band).
These are the processor charges for a single sale only. Monthly fees, network fees and other lines are not included. Rates were as listed on the day we checked.
| Sale | Flat 2.5% | 1.25% + 0.40% + 8¢ |
|---|---|---|
| $5 | $0.13 | $0.16 |
| $40 | $1.00 | $0.74 |
| $200 | $5.00 | $3.38 |
Now the same sales on a Visa Infinite Privilege card, where Visa Canada’s in-person interchange is 2.08%:
| Sale | Flat 2.5% | 2.08% + 0.40% + 8¢ |
|---|---|---|
| $5 | $0.13 | $0.20 |
| $40 | $1.00 | $1.07 |
| $200 | $5.00 | $5.04 |
The cents part of a markup weighs more on small sales. The card type matters more on interchange plus than on flat. Your own mix decides the result. The card fee calculator works it out with your numbers.
How to tell which one you are on
The card fee section of a statement shows which model it uses.
| What you see | Likely model |
|---|---|
| One rate per brand, and little else | Flat rate |
| Each card type with its own interchange rate, plus a separate markup line | Interchange plus |
| Words like “qualified”, “mid-qualified” or “non-qualified” | Tiered |
| “Discount rate adjustment fee”, “differential” or “DRAF” | Differential |
How to Read Your Merchant Statement shows where each section is.
Where to go from here
The table above matches a statement to its model. Whatever the model, the effective rate is total fees charged divided by total card sales. The effective rate calculator does the maths. To learn what the wholesale part is, read What Is Interchange? All the parts of the cost, together: How Much Does It Cost to Accept Credit Cards in Canada?
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