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11 Min. Read

6 Top Payment Processors in Canada

6 Top Payment Processors in Canada

Payments are the end goal of any business. To stay in business, we have to take payments and earn money. Of course, without the right tools, that’s impossible. When it comes to payments, one of the most important tools for any business is a payment processor. Without one, you can’t take a number of different payments, meaning that you may miss out on income.

If you’re looking to expand the payments your business can accept, you might be looking for a new payment processor. Check out the top 6 payment processors in Canada below!

Here’s What We’ll Cover:

What is a Payment Processor?

Payment Gateway Vs Payment Processor

Fees to Expect

What to Look For in a Payment Processor

The 6 Top Payment Processors in Canada

Key Takeaways

What is a Payment Processor?

A payment processor is a company that manages credit card transactions. The credit card transaction process is involved, and a business won’t normally be able to handle it on their own. That’s why payment processors came into existence.

Payment processors all follow the same process, for the most part:

  1. The customer selects their method of payment
  2. The payment processor communicates transaction details to the customer’s bank
  3. The customer’s bank confirms or denies the transaction based on available funds
  4. The payment processor then sends the transaction information to the business’s bank
  5. A receipt is generated for both parties

Payment processing is a lot more complicated than that, but this is the basic process. Payment processors make credit card payments possible. They also allow for debit card payments, and more recently, online payments. Without them, many businesses would be unable to thrive.

Payment Gateway Vs Payment Processor

In your search for a payment processor, you may come across the terms payment gateway and merchant accounts. These are both integral parts of the payments process. However, payment gateways and payment processors are also confused with one another. This article is specifically about payment processors, but understanding all three is imperative.

Payment Gateways

A payment gateway is a type of software meant for handling and transferring cardholder information. This transfer of information is highly important, as it is what allows businesses to receive payments. Think of it like a middle man between the payment processor and the merchant account.

Merchant Accounts

A merchant account is a specialized bank account meant for receiving transactions. It is set up so that businesses can take payments from customers. That being said, it only accepts payments made by cards, or other electronic means.

All three of these elements are required to take payments from customers by electronic means. In many cases, you’ll find payment processors that are also payment gateways. Sometimes, they also provide merchant accounts, making the entire process simple.

Fees to Expect

As a business owner, expenses are always a hot topic. Since payment processors are a service, there are fees to be expected. Each provider has different fees associated with their services, but the most common ones are listed below:

  • Start-up Fee: The fee charged for getting the software setup with your business
  • Transaction Fee: The fee taken any time a transaction takes place
  • Interchange Fee: A fee that occurs between banks for card payments
  • Termination Fee: Charged when service with a payment processor is terminated
  • Gateway Fees: Fees charged by a payment processor for acting as a gateway

Most payment processors will charge some of these fees, but very few charge all of them. Knowing what kinds of fees will be charged can help make deciding on a payment processor easier.

What to Look For in a Payment Processor

When selecting your next payment processing provider, be sure to examine these categories. Depending on how your business functions, some may be better than others.

Methods of Taking Payments

Payment processors come with different ways to accept payments. Some offer integration with platforms you may already be using, while others have proprietary hardware. There are a number of different ways to take payments. Some of the most popular are below:

  • Online terminals (virtual terminals)
  • Traditional credit card terminal
  • Connected card reader
  • Full cash drawers and setups

Types of Compatible Cards

Your business may have customers with cards from uncommon credit card companies. One of the most difficult cards to accommodate in the past was American Express. When you’re looking for a payment processor, be familiar with the types of cards you normally see. The most common are American Express, Discover, MasterCard, and Visa. Being unable to take a payment means missing out on a sale. Be prepared for anything.

Transparent Pricing

No one enjoys hidden fees. When working towards obtaining a payment processing service, make sure that they are transparent. The more money charged for transactions or monthly fees, the less money your business sees. Using the general fees guide above can help you make the right decision.

Customer Service

In order to keep satisfied customers, you must be a satisfied customer yourself. When choosing a payment processor, be sure to check reviews. You want to be able to contact them in a variety of ways should something go wrong. You also want customer service to be responsive. The worst-case scenario is having a customer’s payment go wrong and being unable to help them.

The 6 Top Payment Processors in Canada

If you’re looking for a new payment processor, these are some of the best options available in Canada. Take a look at each, and decide what fits your business’s needs!

1. Clearly Payments

Clearly Payments is a Canadian payment processor located in Vancouver. They aim to be the best possible service provider in Canada and provide low fees and excellent customer service. They have no termination fees, and are transparent in their pricing. When selecting Clearly Payments, you get coverage for both Canadian and United States payments. They actually focus on helping with cross-border payments.

One of the perks to selecting Clearly Payments is the pricing method. They offer a flat rate, monthly charge for their services. This means no extra fees taken out throughout the month. That can be a huge plus for small businesses. Additionally, they cover the merchant account, as well.

The biggest thing that can be said about Clearly Payments is their attention to customers. They provide quick, friendly customer service by phone or email. They have an excellent relationship with their customers and rave reviews. This is one of the best reasons to choose Clearly Payments.

2. Square, Inc.

Square is one of the biggest names in payment processors, especially for small businesses. They were founded in 2009, in San Francisco, California. They are highly popular for merchants that make less than $50,000 a year. That’s because they are an aggregator. This means that they provide a shared merchant account. If the revenue of your business exceeds that, it’s best to find another processor.

Square’s strong selling point is the fees that they charge. For most businesses, there are no signup fees, cancellation fees, and flat-rate pricing. The flat-rate pricing is dependent upon the method of taking payments, however. Their credit card rates range from 2.75% to 3.4%. They also charge no monthly fees, which is a big plus.

The biggest issue with Square is their lack of customer support. Many reviews state that support is hard to obtain from the company. Some accounts are also closed without warning, or reasons provided. This can cause a major disruption in cash flow. If you’re a very small merchant, Square is still an excellent provider, however. Most of the process is easy to get through, and customer support should rarely be needed.

3. FreshBooks Payments

FreshBooks Payments provides a way for businesses to take payments online. This program can be used alongside their other business programs, as well, making all processes streamlined. Their head office is located in Toronto, making them local, as well.

FreshBooks allows businesses to accept payments in a variety of ways. They are able to process MasterCard, Visa, and American Express payments. They also accept Apple Pay, which can be a major advantage online. What’s more is that they integrate with other payment services. By connecting with PayPal and Stripe, FreshBooks has you covered for all forms of payment. You’ll never have to worry about missing income again!

All of FreshBooks Payments’ pricing is transparent, and proudly displayed on their website. They aim to charge the least amount in fees possible, which is good for any small business. Additionally, they provide a plethora of online payment tools that make your website a one-stop shop for business. If you’re looking for the best all-around payment processor, FreshBooks has you covered.

4. Stripe Payments

Stripe is one of the more recent additions to the payment processing industry, being founded in 2011. While that may be true, the fact is that they’ve taken the industry by storm. They started entirely online, looking to resolve the issues regarding online payments. Their competitors had a reputation of frustrating clients. The payment process would navigate customers away from the website, breaking immersion. Using Stripe eliminated that problem altogether.

For the most part, small software as a service (SaaS) providers should be using Stripe. It was designed with them in mind, after all. Stripe’s fees are flat, with a rate of 2.9% plus $0.30 per transaction. This means that calculating your payment processing fees is easy.

The main issue that Stripe faces is in relation to their customer service. Like Square, many users of Stripe have a hard time getting the support that they need. Their customer service is done via email and Twitter, with no option for phone assistance. This can become frustrating. If you want better customer service, you’ll need to find another payment processor.

5. Moneris

Moneris is another Canada-based payment processor. They were founded in 2000, and are based in Toronto. They are best suited for larger businesses, as they have higher setup fees and a tiered pricing system.

Generally speaking, the setup fees surrounding Moneris are high. In addition to setup fees, they also require contracts. The contracts through Moneris generally last for 3 to 4 years. If a business wants to end the contract early, the cancellation fee is near $250. It is recommended that contracts are reviewed in detail. These fees, as well as the pricing model, are much different than the other payment processors listed here.

Because they are a large company, Moneris does come with highly available customer service. They can be contacted 24/7. However, the wait times for phone calls tend to be high, and electronic response times are slow. This is still an improvement from some other payment processors, though.

6. First Data

Last on our list, we have First Data. First Data was founded in 1967, and is based in Atlanta. They are best known for selling and reselling hardware terminals made for taking payments. First Data is the largest payment processor in the world, and is internationally established. If your business processes a large amount of international transactions, First Data is a great option.

Pricing for First Data is not displayed anywhere. Their pricing model is highly dependent upon your business’s needs, and the person you are working with. They are known for having variable contract terms. Along with those contracts come cancellation fees, as well. Understanding the contract entirely is a must before signing on with them.

Because they lack transparency, reviews of First Data tend to be based on contract fine print. Customers have problems with the contracts that they’ve signed, as they missed key points. First Data may be a great option for very large businesses, but small businesses are better off with another processor.

Key Takeaways

Payment processors are a crucial part of any business’s income. They handle all of the technical aspects of taking electronic payments. Without them, businesses wouldn’t have the ability to collect these payments. When selecting a payment processor, understanding their fees, as well as their reputation, is a must. If you’re looking for a payment processor, any of the 6 on this list are excellent choices, depending on your needs.

We have a resource hub with more articles just like this. Be sure to take a look for any business information you may need!