Payment Brand Changes, Canada Edition

Any items billed to Chase Paymentech by the Payment Brands in US dollars will be converted and billed to merchants in Canadian dollars.

On November 1, 2023, your Payment Brand fees¹ will increase as set out below. This is a result of the Canadian federal government’s June 22, 2023, amendment of the Excise Tax Act, subjecting certain services provided by payment network operators to the goods and services tax and harmonized sales tax (GST/HST). Interchange rates are not impacted by this change.

Any items billed to Chase Paymentech by the Payment Brands in US dollars will be converted and billed to merchants in Canadian dollars.

_{1. Not all fees will apply to you. Fees are assessed based on the payment networks that you support.}

On April 12, 2024, Visa will charge a new VI Integrity Risk Fee of 0.113% + 0.113 USD for high-integrity risk transactions with the merchant category codes 5967 (Direct Marketing – Inbound Teleservices Merchant) and 7273 (Dating Services).

Visa will perform enhanced due diligence and monitoring activities to mitigate the higher inherent risk that these transactions carry.

_{Note: Fee includes the impact of the June 2023 Excise Tax Act amendment in which certain services provided by payment network operators are subject to the goods and services tax and harmonized sales tax (GST/HST).}

Effective April 1, 2024, Visa will introduce a Commercial Solutions Fee¹ of 0.0113% for any purchase transaction processed with a Small Business or Commercial Card.

_{Note: Fees include the impact of the June 2023 Excise Tax Act amendment in which certain services provided by payment network operators are subject to the goods and services tax and harmonized sales tax (GST/HST).}

_{1. Fee names may be subject to change.}

On April 1, 2024, Visa will begin charging a Card Verification Value 2 (CVV2) fee of 0.0028 USD for every CVV2 result that receives an M (Match) or N (No Match). Positive matches may result in a higher approval rate, reduced chances of fraud, as well as fewer disputes.

The CVV2 fee will not apply to the following conditions:

• Verification results not received by the bank due to an error
• Returned values that are not M or N
• Successful 3DS verifications
• Zero-amount account verification messages

_{Note: Fees include the impact of the June 2023 Excise Tax Act amendment in which certain services provided by payment network operators are subject to the goods and services tax and harmonized sales tax (GST/HST).}

Update: Visa has changed the effective date to April 25, 2024. The first billing of these fees will be in May 2024.

On January 25, 2024, Visa will begin monitoring their Processing Integrity Program and the fees listed in the table below will be assessed for domestic and international transactions. These fees will apply when transactions are not authorized, reversed, or cleared as required. The first billing of these fees will be in March 2024.

Table – Visa Processing Integrity Fees

Any items billed to Chase Paymentech by the Payment Brands in US dollars will be converted and billed to merchants in Canadian dollars.

_{1. Includes the impact of the June 2023 Excise Tax Act amendment in which certain services provided by payment network operators are subject to the goods and services tax and harmonized sales tax (GST/HST).}

Effective April 2024, Visa will start charging a Payment Account Number (PAN) Pass Back Program fee of 0.02 USD per event for transit and urban mobility operators. This program will only be available for transit merchants processing token transactions under the following Merchant Category Codes:

• MCC 4111 - Local and Suburban Commuter Passenger Transportation, including ferries
• MCC 4112 - Passenger Railways
• MCC 4131 - Bus Lines

You can implement a payment account reference (PAR) in your system before April 2024 to avoid this fee. The PAR provides the ability to link payment activity to a payment account.

Visa will stop sending PANs in transaction responses beginning April 2026. 

On October 13, 2023, Visa will introduce an account listing service for issuers called Visa Account Screen, which will block authorizations and deposits for a cardholder’s lost, stolen, or closed account. With this new feature, Visa will assess a 5 USD deposit fee for each returned or rejected transaction when either of the following scenarios occur.

• An unauthorized force-post transaction was received that was above the floor limit or the floor limit could not be determined, and the account was listed on the Account Screen Clearing File (ASCF) or Card Recovery Bulletin (CRB)
• The account number was listed in the ASCF or CRB on the purchase date and the amount was below the floor limit without authorization

To avoid this fee, please make sure you:

• Request an authorization or deferred authorization when required,
• Submit the authorization code, authorization source code and transaction identifier assigned during a deposit’s authorization,
• Do not submit deposits for transactions that have been declined, and
• Use zero-amount account verification messages to check the status of the account.

On October 15, 2023, Visa will update their interregional interchange program with the new fee programs, names and rates listed in the below tables. The following fees for consumer transactions will be discontinued:

• Electronic
• Acquirer Chip
• Issuer Chip
• Electronic Commerce Merchant
• Secure Electronic Commerce

Table 1 – Visa Interregional Base Fee (Card-Present) Programs

Table 2 – Visa New Interregional Alternative Fee (Card-Not-Present) Programs for Visa Consumer and Visa Commercial, Including Business, Products

Table 3 – Visa New Interregional Downgrade Fee Programs for Visa Consumer and Visa Commercial, Including Business, Transactions

Table 4 – Visa New Credit Voucher or Merchandise Return Interregional Fee Programs

Table 5 – Visa Updated Interregional Standard Fee Program

_{1.        Visa and non-Visa interregional transactions that do not qualify for any other fee program.}

Effective October 15, 2022, Visa will require all point-of-sale (POS) and unattended cardholder-activated terminal (UCAT) acceptance devices to be chip-reading. A system integrity fee will apply to non-compliant POS and UCAT devices on a per-transaction basis as shown in the table below.

No action is required at this time for non-integrated, stand-alone POS devices that we provided.

For customized/integrated POS devices, please contact your service provider(s) to ensure equipment software and hardware will be ready to support chip acceptance by October 15.

For UCAT equipment not provided by us, please contact your service provider(s) to meet the chip compliance due date above.

_{Published September 13, 2022}

Update: The Visa Digital Credential Updater Fee will be billed on a quarterly basis until the end of Q3 2024. After this period, you will be billed monthly.

Starting August 1, 2023, Visa will charge a Visa Digital Credential Updater Fee (VDCU Cred Update Fee) of 0.09 USD for all VDCU activities. This fee will be billed when a token is used in a transaction for the first time following an update to that token’s PAN or expiration date.

The VDCU provides access to token lifecycle management events including credential on file updates and token status change notifications, such as deleted, suspended, and resumed token updates. These lifecycle updates can help you ensure cardholders’ payment credentials are up to date, which is essential for maintaining payment continuity and improving authorization rates.

On April 15, 2023, Visa will launch their Flexible Credential credit card in the United Kingdom. This card supports buy now, pay later (BNPL) transactions in card-present and card-not-present environments. The existing Visa Interregional Premium Card – CA Fee of 1.80% will apply when this card is processed.

_{Published February 15, 2023}

Starting April 17, 2023, Visa will charge a .02% fee for every Estimated Authorization and Incremental Authorization request (see below).

• Estimated Authorization Request: allows you to obtain an approval before a cardholder has identified what goods or services will be purchased
• Incremental Authorization Request: allows you to increase the total authorized funds if the initial estimated amount is insufficient

_{Published January 13, 2023}

On April 1, 2023, Visa will charge a fee for their Account Verification Service shown in the table below. This service, also known as zero-dollar status check, allows you to check the validity of a card account before submitting authorization requests or storing an account on file. Account Verification requests may also include verification of a cardholder’s address (Address Verification Service¹) and CVV2 (Card Verification Value).

Table – Visa Account Verification Fees

^{1. Existing Address Verification Fee will not be charged when conducted with an Account Verification transaction.}

_{Published December 12, 2022}

Update: Effective June 15, 2023, Visa will expand their Visa Flexible Credential products to support debit transactions. The rate will remain the same.

On January 20, 2023, Visa introduced the new Visa Flexible Credential prepaid card, which supports buy now, pay later purchases in virtual and physical environments. These cards were issued in the Asia Pacific, Central Europe, Middle East and Africa regions. If you process one of these cards, the existing interregional interchange rate will apply as shown in the table below.

Table – Interregional Rate for Visa Flexible Credential Purchases

_{Updated March 15, 2023
Updated October 14, 2022}

Update: Mastercard has changed the effective date of the M/Chip Deployment Performance Program fee to November 30, 2024. The assessment date mentioned below will no longer apply.

On October 13, 2023, Mastercard will implement an M/Chip Deployment Performance Program fee to devices and POS terminals that experience an implementation issue and cause a technology failure in a recurring 30-day period.

Chase will assess this fee starting November 13, 2023. To avoid it, please make sure that your terminal’s Payment System Public Keys (PSPK) in the Combined Dynamic Data Authentication (CDA) are updated and/or your software kernel has a V3.x reader.

If your POS is supported by a third-party integrator, please contact your service provider to ensure you have the latest upgrades and specifications that comply with Mastercard’s requirements to help you avoid these fees.

This does not apply if you have a stand-alone POS device that is supported by Chase.

Table  – Updated Mastercard M/Chip Deployment Performance Program Fee

_{1. Includes the impact of the June 2023 Excise Tax Act amendment in which certain services provided by payment network operators are subject to the goods and services tax and harmonized sales tax (GST/HST).}

Update: On April 1, 2024, Mastercard will begin charging the fee in the table below when there are 35 declined attempts within a 30-day period on the same account number, at the same card acceptor, and for the same amount. This new requirement is in addition to the existing Excessive Authorization Attempts TPE threshold of 10 declined attempts per 24-hour period. The first affected billing will be in May 2024.

On November 1, 2022, Mastercard will reduce the threshold of declined attempts for the Excessive Authorization Attempts TPE program from 20 to 10. Anything over the new threshold will be charged as shown in the table below.

Table – Mastercard Excessive Authorization Attempts Rate

On January 1, 2024, Mastercard will revise the Transaction Processing Excellence (TPE) program pricing. You will see these changes reflected on your March 2024 billing statement.

Table – Mastercard TPE Program Pricing

_{1. New pricing also reflects increases that resulted from the Excise Tax Act amendment.}

On October 13, 2023, Mastercard will expand their Enterprise Solution Wholesale Travel Program with the commercial credit interchange rates listed in Table 1. The existing interchange rates in this program (see Table 2) remain unchanged.

All merchant category codes (MCCs) with business-to-business transactions will qualify for this program.

Table 1 – Mastercard New Commercial Interchange Rate for Credit Transactions

Table 2 – Mastercard Existing Commercial Interchange Rate for Credit Transactions

On October 9, 2023, Mastercard will begin assessing a new Authorization Optimizer Service Fee (Auth Optimizer Power by AI Fee) of 0.02 USD. For this service, Mastercard is leveraging their network visibility and artificial intelligence to provide you with insights on how and when to resubmit authorization requests for a successful approval. 

 This fee will be charged when a card-not-present (CNP) transaction is declined and meets all of the following conditions: 

• Transaction is recurring 

• Mastercard decline reason code is equal to 51 (Insufficient Funds) 

• Mastercard-provided payment advice code is equal to 24 to 30, as shown in the below table 

Table – Mastercard Existing Payment Advice Codes 

Update: On September 12, 2023, Mastercard’s DRCS Fee will start applying to all card-not-present transactions including, but not limited to, account verification transactions and refund authorizations. This fee will not apply to mail order/telephone order (MOTO) transactions. All other conditions mentioned below remain the same. 

On April 22, 2022, Mastercard introduced the Decline Reason Code Service (DRCS) fee, which is charged when Mastercard sends a Merchant Advice Code (MAC) when the card issuing bank did not provide one. 

Table 1 – DRCS Fee 

The fee will be charged when all of the following conditions are met: 

• Transaction is card-not-present¹ (excluding MOTO transactions) 
• Mastercard decline reason² is equal to one of the following: 
  • 79 (Lifecycle) 
  • 82 (Policy) 
  • 83 (Security) 
• MAC provided is equal to one of the following: 
  • 01 (Updated/additional information needed) 
  • 03 (Do not try again) 

As a best practice, you can take the suggested actions below when you receive the MACs shown in Table 2. 

Table 2 – DRCS Suggested Merchant Actions 

_{1. Including, but not limited to, account verification transactions and refund authorizations 
2. These are categories of a new subset of sensitive decline reasons that Mastercard will map on behalf of the issuer.} 

On May 7, 2023, Mastercard is modifying their intracountry consumer credit contactless interchange rates (see table below). These rates apply to transactions that are processed in the Canada region and initiated with a card issued in the Canada region.

Table – Mastercard Intracountry Consumer Interchange Rates for Credit Contactless Transactions

_{Published January 13, 2023}

On March 13, 2023, Mastercard will introduce the Digital Enablement Fee (DEF) billing structure shown in Table 1. This program also zeroes out several fees shown in Table 2.

The DEF applies in the following card-not-present authorization activities¹.

Table 1 – Mastercard DEF Rates for Card-Not-Present Transactions

Table 2 – Mastercard DEF Expansion Zeroed-out Fees

 _{1. Authorization Decline for insufficient funds are excluded from billing assessments.}

_{Published December 12, 2022}

Beginning May 21, 2023, the existing OptBlue Card-Not-Present Fee of 0.30% will apply to any non-swiped (card/device-not-present) transaction that does not contain the full magnetic stripe or chip card data. For example, this fee will apply to a manually keyed transaction.

For merchants in the utilities category, this fee will not apply to credit card and foreign-issued debit card transactions.

_{Published February 15, 2023}

On April 14, 2023, American Express OptBlue will revise their international fees (see table below) for:

• All transactions using American Express debit and credit cards issued outside of Canada, and
• All industries, except Utility

Table – American Express OptBlue International Fees

_{Published January 13, 2023}

On April 1, 2024, Interac will reduce their debit switch fee as shown in the table below.

Table – Interac Updated Switch Fee

Update: On November 1, 2023, Interac will include MCC 4784 (Toll Roads/Bridges) in Tier 1 of their pricing structure. Rates and other qualifications remain the same.

Effective November 1, 2022, Interac changed their interchange pricing structure for Interac Flash transactions with the following conditions:

• Interac introduced a new pricing tier (Tier 4) for Debit Contactless transactions between $100.01 to $250.00
• The interchange flat-fee of $0.055 for Tier 4 will apply to all transactions between $100.01 to $250.00, regardless of the tier pricing for which the merchant has qualified for
• Criteria for merchant qualification under pricing tiers 1, 2 and 3 will remain unchanged for transactions between $0.01 to $100.00
• Flat-fees for transactions between $0.01 to $100.00 will remain unchanged

Interac Flash interchange fees will apply based on the tier pricing that you have qualified for as determined by:

• 2022 calendar year Interac Flash interchange transaction volumes, or
• Your qualification for Merchant Category Codes (MCC) segments

The current and new flat-rate interchange fees are outlined in the tables below. In addition, the tables also contain the criteria for merchant qualification for each fee tier.

Table 1 – Interac Flash Interchange Pricing for Tier 1 Low-Ticket Merchants¹

Table 2 – Interac Flash Interchange Pricing for Tier 2 High-Volume Merchants²

Table 3 – Interac Flash Interchange Pricing for Tier 3 All Other Merchants³

_{1. Criteria for Merchant Qualification: MCC Merchants in segments with an average Interac Debit Contactless transaction size of $20 and below. Qualifying segments are Fast Food Restaurants (MCC 5814), Variety Stores (MCC 5331), Movie Theatres (MCC 7832), Convenience Stores (MCC 5499), Bakeries (MCC 5462), Dairy Product Stores (MCC 5451), Limousines and Taxicabs (MCC 4121), News Dealers and Newsstands (MCC 5994), Charitable and Social Services Organizations (MCC 8398), and Transportation – Suburban and Local Commuter Passenger (MCC 4111), Toll Roads/Bridges (MCC 4784)}

_{2. Criteria for Merchant Qualification: Merchants that meet the minimum annual transaction volume threshold of 20 million Interac Debit Contactless transactions, based on transaction volume in the previous calendar year}

_{3. Criteria for Merchant Qualification: Merchants that do not otherwise qualify for Tier 1 and Tier 2}

Starting April 1, 2023, Interac will increase their debit switch fee as outlined in the table below.

Table – Interac Switch Fee

_{Published December 12, 2022}