Payment Processing Fees Still Erode Margins for Local Businesses

Payment Processing Fees Are Quietly Eroding Margins for Local Businesses

Payment processing fees may seem minor, but for local businesses operating on tight margins, small percentage costs are adding up to a meaningful financial burden in 2026.

1. Karalee Greer & WBN News Vancouver & WBN News Kitsilano & WBN News Langley & WBN News Sea To Sky

Jan 21, 2026 - 1 min read

By Karalee Greer | WBN News – Kitsilano | January 21, 2026
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For many local businesses, accepting card payments is no longer optional. But the cost of doing so is becoming an increasingly significant pressure on already-tight margins.

According to Canadian payment industry data compiled by Clearly Payments, most businesses pay between roughly 1.7% and 3.5% per transaction when customers use credit cards, depending on card type and pricing structure. While debit transactions in Canada are typically lower-cost, credit cards continue to dominate consumer spending, particularly in retail, hospitality, and professional services.

These fees are not a single charge. As explained in guidance from CleverPays, payment costs are made up of interchange fees set by card networks, processor markups, and assessments. Interchange fees alone account for a large portion of what businesses pay on every credit card sale, making them difficult to avoid.

For businesses operating on margins of 5% or less, even a modest processing rate can quietly remove thousands of dollars from annual profit. A steady stream of card transactions at a blended rate of 2% can quickly become one of the largest non-labour expenses on the books.

There has been some relief. The federal government announced that recent agreements with major card networks will reduce average credit card interchange fees for eligible small businesses by up to 27%, a move intended to ease cost pressures over time. Federal Government Announcement 2024

Looking to Reduce Your Credit Card Fees? Click here

Still, many owners remain unaware of how much payment processing truly costs them. As 2026 unfolds, more businesses are beginning to review statements, renegotiate rates, and encourage lower-cost payment options as a way to protect margins without raising prices.

Karalee Greer
Subscription to WBN and being a Contributor is Free.
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