Canadian Merchant Accounts

Canadian Merchant Accounts

At Durango, we often get the question from potential Canadian clients, “how do I get a merchant account?” To start, we have several different types of merchant accounts catered to Canadian merchants, including the merchant account for Canadian businesses. However, there are some key variables that need to be taken into account before we can determine the ideal solution for your business. For example, we need to know what market you will be primarily pursuing: the U.S. market, the Canadian market or the international market. The reason for this is because we need to determine which currency you are looking to process in, either USD, CAD, or another currency.

Another factor that we will need to determine is whether you have a U.S. dollar or Canadian dollar checking account, or both. And is this bank account with a U.S. bank or a Canadian bank? We’ll cover each of these matters in more depth below so that Canadian merchants can obtain the appropriate processing solution for their business.

What is Your Primary Geographic Market?

The reason we ask this question is that we need to know if you are primarily marketing to consumers in the U.S., Canada or outside North America. This will help us determine which currency you are going to be processing in.

In short, if you going after the Canadian eCommerce market, or are a retail merchant in Canada, we will place you with one of our local experts so that you will process transactions in CAD currency. This will also enable you to get the lowest fees, fastest funding, and best logistical support. Likewise, if you are a Canadian business but you are marketing to US consumers, we will ideally place you with a local-based processor for the same reasons, except of course the account will be processed in USD currency. Conversely, if you are pursuing the global market and specifically non-U.S. & non-Canadian transactions, we would look to place you with one of our E.U.-based processing banks providing multi-currency processing.

The reason for placing your account with a processor in the country that you are targeting transactions in is two-fold: first, maximizing profits for our merchants; and second, ensuring that your customers do not get charged an “international surcharge” by their own card-issuing bank.

If you are a merchant account in Canada using a Canadian processor but are marketing almost exclusively to the U.S., you will be paying “cross border” downgrade fees on those transactions from Visa & MasterCard, so your effective rate on transactions can often be 1-2% or more higher than they should be. However, if you are using one of our exclusive U.S.-based processors that will accept Canadian signers, then you would pay the lowest rate on those transactions as no “cross border” fees would apply.

Secondly, many U.S. card-issuing banks will charge their customers a 1% surcharge on “international” transactions, and if you are using a Canadian merchant account to charge U.S. customers, this obviously isn’t ideal for your customers, making you a merchant account in Canada.

Is Your Bank Account with a US or a Canadian Banking Institution?

If you are primarily working with the American market and wish to get the most out of your processing and marketing investment, then going with a U.S.-based processor will be crucial. However, to go this route, the Canadian merchant will have to set up a U.S. dollar checking account with one of several U.S.-based banks that will accept Canadian signers. We are familiar with U.S. banks that will issue checking accounts to Canadian signers without much trouble that provide low or no cost checking and remittance accounts to Canadian companies and individuals, please just ask.

If you wish to pursue the Canadian market or are a brick-and-mortar merchant in Canada, then one of our Canada-based solutions will be ideal. For those Canadian merchants doing the occasional transaction with American consumers, our Canada-based processors can also provide USD processing with deposits to a USD checking account based locally. This is also valid for those businesses that are considered merchant account in Canada. In addition, our Canadian processors are going to be ideal for those merchants wishing to accept Interac-based debit transactions.

Which Shopping Cart & Payment Gateway Are You Utilizing?

Based on your answers to the questions above, we will additionally need to confirm which shopping cart software you are intending to use. We also must ensure that the shopping cart is going to be compatible with the payment gateway that works with either the U.S. or the Canadian processing bank. Of course, if you are not using a 3rd-party shopping cart, you can integrate directly to Durango’s gateway or use the online “Virtual Terminal.”

  • If you are going to be applying with our U.S. processing bank, you will be able to use most any shopping cart, as Durango’s payment gateway supports almost all shopping carts in the market already. If required, we do support other select gateway options.
  • If you are going to be applying with our Canadian processing bank, and processing in USD currency, again, we will be able to board you with Durango’s payment gateway (the same shopping carts from the previous hyperlink are supported), as well as a few other popular gateway options, if required.
  • If you are going to be applying with our Canadian processing bank, but processing in CAD currency, you will need to be using one of the supported shopping carts for the CAD gateway.

As always, if you have questions about any of our processing solutions, please give us a call or send us an e-mail. We’d be happy to help our neighbors.

Durango Merchant Services can ensure that a merchant account in Canada receives the best rates and service possible. Taking advantage of the entire U.S. and Canadian market is crucial for online retailers. By offering credit card processing to customers across the border, you are increasing your sales and your customer base. Contact us today to see how you can get started.

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