What is Interac? A merchant's guide to debit in Canada

What is Interac? It's the Canadian payment company behind Interac Debit, the service that lets customers pay straight from their bank account at your checkout, and behind Interac e-Transfer, which moves money between bank accounts. When a customer inserts a bank card and enters a PIN, or taps a card or phone, and the money comes straight out of their bank account, that's Interac Debit at work.

For a merchant, Interac matters for two reasons. A big share of your customers pay with debit, and debit is usually your cheapest card payment. Interac says Interac Debit "offers a single flat fee regardless of purchase price," and puts the cost at around 10 cents per transaction. Here's how it works, what it costs you, and where Interac e-Transfer fits.

What is Interac Debit?

Interac Debit is a Canadian debit payment service that lets customers pay directly from their bank account, in store and, where it's accepted, online and in apps. Customers can insert their card and enter a PIN, tap the card, or tap a phone or watch with the card loaded in a digital wallet.

Every Interac Debit payment is approved by the customer's bank or credit union in real time. The money is either in the account or it isn't.

Interac Debit isn't the same thing as Visa Debit or Debit Mastercard. Those are separate networks with their own rules and pricing. Visa's published "Electronic" interchange for Visa Debit is 3 cents a transaction, and Mastercard's "Electronic" rate for Debit Mastercard is 0.25% plus 5 cents. Your statement may show all three, so it helps to know which is which.

How does an Interac Debit payment work?

Here's what happens in the second or two between the tap and the beep:

1. The customer taps their card or phone, or inserts the card and enters a PIN.
2. Your terminal sends the payment to your processor, the acquirer that connects you to the Interac network.
3. The customer's bank or credit union checks the account and approves or declines the payment in real time.
4. The approval comes back to your terminal and the receipt prints.
5. Your processor deposits the money in your business account on its normal schedule. We offer same-day or next-day funding options if timing matters to your cash flow.

Step 3 is the part that matters. A credit card payment draws on credit the card issuer extends to the customer. An Interac Debit payment draws on money already sitting in the customer's account, and that's why Interac can promise merchants no chargebacks.

How does Interac Flash work?

Interac Flash is the name Interac gave its contactless debit. Today you'll mostly see it described simply as tapping. The customer holds a debit card, phone, or wearable near the terminal, the bank approves it, and there's no PIN for smaller amounts.

The limits work like this:

• Per transaction, limits are set by the customer's bank or credit union, up to $250. Interac's business page says they're typically set to $250.
• Each bank also sets a cumulative contactless limit, a running total across taps. Once a customer reaches it, they have to complete a chip and PIN transaction to reset it.
• Above either limit, the card goes into the terminal and the customer enters a PIN.

So a terminal that only takes tap payments will fail on a $300 purchase, or on any customer who has hit their cumulative limit for the day. Make sure yours takes chip and PIN too.

You don't always need a separate terminal to accept tap payments. Interac says businesses can accept Interac Debit contactless payments directly on a smartphone with Tap to Pay on iPhone, and with Tap to Pay on Android on compatible phones and tablets. That works well for markets, house calls, and backup, within the same tap limits.

How much does Interac cost merchants compared with credit cards?

Interac Debit is priced per transaction; credit cards are priced as a percentage of the sale. That one difference explains most of the gap.

On Interac's side, its fee page says interchange for Interac Debit is currently set at zero. Contactless Interac Debit carries a small flat interchange fee instead, set in tiers: for most merchants, 3.5 cents on purchases up to $100, and 5.5 cents on purchases from $100.01 to $250. Your processor then adds its own fee. Interac's estimate of the total cost to a merchant is around 10 cents.

Credit card interchange is a percentage. Visa's published rate for a Classic, Gold, or Platinum card used in store is 1.25%, and 1.57% for Visa Infinite. Mastercard's card-present rate is 0.92% for a core card and 1.56% for World Elite. Here's the interchange alone on three sale sizes, before any processor markup:

Now a whole month. Say a gift shop in Victoria makes 1,000 card sales a month averaging $40, half on Interac tap and half on Visa Classic cards. Interac interchange comes to $17.50. Visa interchange at 1.25% comes to $250. Even if the shop qualifies for Visa's small-merchant rate, 0.77% today and 0.70% from October 24, 2026, Visa interchange is still $140 to $154, eight to nine times the Interac figure.

Two other cost points matter. Interac says there are zero chargebacks with Interac Debit, so a debit sale can't come back to you as a chargeback months later. And you can't pass the fee along the way you can with credit. Interac's rules cap any surcharge fee on Interac Debit at $0.25 and say merchants "may not directly apply a surcharge," and Quebec bans fees for paying by debit or credit altogether. Our guide to credit card surcharges in Canada covers what is allowed.

Interac Debit or credit card: what's the difference for your business?

Side by side, the two look like this for a merchant in store:

Don't push customers away from credit. People who prefer it have their reasons, and a customer who leaves is worth more than any fee you save. Just make debit the easy choice.

What is Interac e-Transfer for business?

Interac e-Transfer moves money from one bank account to another, and Interac e-Transfer for Business adds features built for companies. Interac says business transactions can be for up to $25,000, depending on your financial institution and account type, and that you can send up to 10,000 payments at a time. The business features include:

• Business Request Money, for sending payment requests to customers.
• Bulk payables, for paying many suppliers or staff in one action.
• Bulk receivables, for sending payment requests to a whole customer list by email or text.
• Autodeposit, so incoming payments land without a security question.

Your bank or credit union sets the fees, so ask yours what it charges and which features it offers. E-Transfer fits invoices, deposits, and payments from other businesses better than the checkout counter, where your debit machine does the job. If you'd rather take card payments by invoice or link, our virtual terminal handles payment links, invoices, and recurring billing.

Why accepting Interac matters for Canadian merchants

Start with how people pay. In 2025, debit cards made up 25% of all payment transactions in Canada and credit cards 43%, according to Payments Canada. Turning away debit means turning away a quarter of the transactions walking through your door.

Then look at cost. Every sale that moves from a premium credit card to Interac drops from a percentage to a flat amount, and the gap grows with the size of the sale. The Code of Conduct for the Payment Card Industry in Canada lets you offer discounts for different payment methods, so a small discount for paying by debit is a legitimate way to nudge customers.

The same Code says you can accept a network's credit cards without being obligated to accept its debit cards, or the reverse. On paper you could skip debit. We can't think of many small businesses where that would be a good trade.

Can you accept Interac online?

Yes, in some setups. Interac says customers can pay with Interac Debit online at participating merchants through Apple Pay or Google Pay, once the debit card is loaded in their digital wallet. If you sell online, ask your processor whether your checkout can accept it, and what it costs, before you assume your customers can only pay online by credit card.

For bigger or less frequent payments, such as a deposit on a catering order or a contractor's invoice, Interac e-Transfer for Business can do the job without a card at all.

Common Interac mistakes to avoid

• Paying a percentage on Interac. Interac Debit is built as a flat-fee payment. If your statement shows debit charged as a percentage of sales, ask your processor why.
• A terminal that only takes taps. Sales over the customer's tap limit, and customers who have reached their cumulative limit, need chip and PIN.
• Treating debit like credit for surcharges. Visa and Mastercard bar surcharges on their debit cards, Interac caps any debit fee at $0.25 applied through your acquirer, and Quebec allows no fee at all.
• Mixing up Interac Debit and Interac e-Transfer. One happens at your terminal; the other runs through your bank account.
• Assuming every debit card payment is Interac. Visa Debit and Debit Mastercard payments follow those networks' rules and pricing, so check how each one appears on your statement.

How do you start accepting Interac?

1. Sign up with a payment processor. Interac says you have to connect with an acquirer to offer Interac Debit, and your processor handles that.
2. Get a terminal that takes Interac chip and PIN and tap, or use tap to pay on a phone for low-volume sales. Our guide to choosing a debit machine walks through the options.
3. Ask for the per-transaction price of Interac in writing, alongside your credit card rates.
4. Check your first statement and confirm Interac shows up as a flat amount per transaction, not a percentage.

We provide POS terminals and mobile payments that take Interac, Visa, Mastercard, Apple Pay, and Google Pay, with interchange-plus pricing and no long-term contracts. Interac's limits and pricing structure are the same whether you sell in Ottawa, across New Brunswick, or anywhere else in Canada. Quebec is the one place that adds its own rule, a ban on fees for paying by card.

The next step

If you already take cards, look at your last statement and find what you paid per Interac transaction and what you paid as a percentage on credit. If you can't find either number, that's a sign the statement is doing you no favours. Send it to us for a free statement review and we'll break out your debit and credit costs line by line, or read our guide to credit card fees in Canada first.