February 11, 2026 · 5 min read
If you run an online store, you already know that payment processing fees are your second or third largest expense after inventory and marketing. What you might not know is exactly how much those fees are costing you — or that a significant portion of what you're paying is unnecessary.
Statista reports that Canadian e-commerce surpassed $75 billion in 2025, with the average online retailer's payment processing costs consuming 2.9% to 4.2% of gross revenue. For a store doing $500,000 in annual sales, that's $14,500 to $21,000 in fees. The gap between the low end and the high end is $6,500 — and it has nothing to do with how much you sell. It's determined by your processor, your gateway, and how your checkout is configured.
Card-not-present (CNP) transactions — which is what every online purchase is — carry higher interchange rates than card-present (swiped or tapped) transactions. This is because the fraud risk is higher when the physical card isn't present. Visa and Mastercard set CNP interchange rates 0.3% to 0.8% higher than their in-store equivalents.
That base difference is legitimate. What's not legitimate is the additional fees that e-commerce processors stack on top:
Your payment gateway (Stripe, PayPal, Authorize.net, etc.) charges its own fee on top of the card network's interchange. Common structures include:
Notice the pattern? Everyone charges "2.9% + $0.30." This bundled rate was established by PayPal over a decade ago and became the industry default. It has very little to do with actual interchange costs, especially for debit transactions where interchange is a fraction of a percent.
If you're on Shopify, BigCommerce, or WooCommerce with a hosted payment solution, there's often an additional platform fee:
If you sell to US customers (and most Canadian online retailers do), every USD transaction gets hit with a 1.0% to 2.5% currency conversion fee. On cross-border sales, your effective processing rate can hit 5%+ before you realize what's happening. The Bank of Canada's exchange rate is freely available, but processors apply their own markup on top of it.
E-commerce has significantly higher chargeback rates than in-store retail. When a customer disputes a charge, your processor hits you with a $15 – $25 chargeback fee per dispute, regardless of the outcome. High-volume online stores can face thousands of dollars in chargeback fees annually, even with low dispute rates. The Visa Dispute Monitoring Program can also impose additional penalties if your dispute rate exceeds thresholds.
This is the single highest-impact change for most online stores. When you switch from bundled "2.9% + $0.30" pricing to interchange-plus (e.g., interchange + 0.4% + $0.10), your effective rate on debit transactions drops dramatically. Canadian debit interchange is often just $0.07 – $0.12 per transaction. Under bundled pricing, you're paying $0.30 + 2.9% for that same transaction. The math is not complicated.
Debit transactions have the lowest interchange rates. If your checkout flow makes it easy for customers to pay with debit (Interac Online, Visa Debit, Mastercard Debit), more customers will choose it. Display debit options prominently, and consider offering a small incentive for debit payments.
Clear product descriptions, accurate shipping timelines, responsive customer service, and easy return policies reduce disputes. Implement 3D Secure (Verified by Visa / Mastercard SecureCode) to shift liability for fraudulent chargebacks from you to the card issuer.
Instead of processing everything in CAD and letting the card network do the conversion, use a processor that can settle in multiple currencies. This eliminates conversion fees for your customers and often reduces your costs as well.
When your e-commerce platform is custom-built, you're not paying Shopify's transaction surcharges or fighting WooCommerce's security headaches. You choose your payment processor, your gateway, and your checkout flow. There's no platform tax between you and your revenue. Check out our portfolio to see what custom e-commerce platforms look like.
NovaPay's e-commerce processing is built specifically for online retailers who are tired of overpaying:
And here's the offer that makes switching an obvious decision: businesses that onboard with NovaPay for payment processing are eligible for up to $10,000 in credit toward a single web development project from Nova Web. For most small businesses, that fully covers a custom website or e-commerce platform — essentially a free website that eliminates Shopify's transaction fees and gives you complete control. This credit is available exclusively to businesses onboarding for NovaPay processing services, and is limited while space is available.
Stop paying a platform tax on your revenue. Request a free payment audit and we'll show you exactly how much you can save.