Entrepreneurship & Small Business

Best way to charge a USD credit card payment from Canada?

  • Last Updated:
  • Feb 14th, 2021 9:28 pm
[OP]
Newbie
Mar 30, 2020
3 posts

Best way to charge a USD credit card payment from Canada?

Hello RFD

We sell equipment to private labs in the US and Canada and for years we've just had straight forward PO/invoice/wire or cheque type orders come through in both the US and Canada without issue. Recently a customer wanted to purchase an entire device (roughly $100k USD) on their US AMEX card, we told them we weren't interested but at the end of the day that was the "only" way they could place the order and it was still a good order. We already bank with TD so we called TD merchant services to see what our options were.

We explained the whole situation to the sales agent and are setup with a CAD Merch account, instructed to select USD and deposit to our TD USD$ acct. The only charge will be a 2.9% amex fee and a monthly $10. Cool, we move forward.
Go to bill the customer and we can't select USD...sure enough you can't do that with this account type.
Back to the drawing board, they move us to a USD Merch acct, this one comes with a $40/month fee for a min of 2yr but the rate was a bit better and we figure we may use it in the future??
Go to bill the customer and find out the TD USD Merch acct can't charge AMEX cards (explains the better rate I guess)...
So in the end we're back to the CAD acct, charge the US customer in CAD based on most recent exchange rate and poof it goes through, we get our money!!!!

Flash forward to months end, our TD Merch acct charge which was a whopping 4.05% of purchase price! This was well in excess of the 2.9% +transaction fee we had been told about. There was now a foreign transaction fee of .8% and a "discount and adjustment fee" of 1% along with a few other little fees here and there.

Not only has this whole process been time consuming and frustrating, but 4.05% for processing the transaction is highway robbery. The high fees and poor service so far make me want to find something better, we did rush into this in order to get the payment processed (it had to be done before customers year end) but moving forward I'd like to find a better solution.

Any ideas on how we can cost effectively bill our US customers in USD on their US credit card without getting blasted with high fees?
11 replies
Member
Feb 18, 2014
262 posts
60 upvotes
For cross border transactions, you will always be around 3.00% minimum. This is due to the cross border assessment fees that are charged by the Card Brands (Visa, MC etc). As you’ve already discovered, Amex is even more expensive. Many Canadian businesses do not accept Amex as a result. You can get lower rates if you setup a US account in a US domiciled bank.
Deal Addict
Jan 21, 2018
4372 posts
4434 upvotes
Vancouver
Highway robbery is a good general term to apply to credit card rates when accepting U.S. credit card payments from customers as a Canadian company.

We used to pay 2.9% with Stripe until last year, when they decided that Canadian companies should pay 3.5% to accept US$ credit card payments going to U.S. domestic bank accounts just because they are Canadian companies. BTW, Stripe also applies that rate to payments from any other country, even if the payment is in CAD going to a Canadian bank account, because it's a "foreign" transaction. There is no limit to the greed of these companies.
Member
Feb 18, 2014
262 posts
60 upvotes
Scote64 wrote: Highway robbery is a good general term to apply to credit card rates when accepting U.S. credit card payments from customers as a Canadian company.

We used to pay 2.9% with Stripe until last year, when they decided that Canadian companies should pay 3.5% to accept US$ credit card payments going to U.S. domestic bank accounts just because they are Canadian companies. BTW, Stripe also applies that rate to payments from any other country, even if the payment is in CAD going to a Canadian bank account, because it's a "foreign" transaction. There is no limit to the greed of these companies.
The companies in question are Visa, MasterCard etc. they charge a cross-border assessment fee on top of their domestic assessment fee. If your account is in USD, you are looking at a 1% additional fee.
Newbie
Feb 17, 2017
70 posts
18 upvotes
The customer probably wants to use his Amex to get the reward points. For a $100k purchase he might collect $1,250 in cash equivalent points.

My business used to accept Amex but stopped because of the higher processing fees. It's basically robbing the merchant and then Amex kicks back a little to the cardholder for bringing them the victim.

If it were me I would ask the customer for a 'real' payment like wire or cheque, and if they insist on Amex, then say ok but we're going to add the processing fee to the invoice.
Member
Feb 18, 2014
262 posts
60 upvotes
zorg001 wrote: The customer probably wants to use his Amex to get the reward points. For a $100k purchase he might collect $1,250 in cash equivalent points.

My business used to accept Amex but stopped because of the higher processing fees. It's basically robbing the merchant and then Amex kicks back a little to the cardholder for bringing them the victim.

If it were me I would ask the customer for a 'real' payment like wire or cheque, and if they insist on Amex, then say ok but we're going to add the processing fee to the invoice.
Charging an additional fee for credit transactions is against all card brand rules. If you get caught, you can lose credit acceptance privileges.
Deal Addict
Jan 21, 2018
4372 posts
4434 upvotes
Vancouver
gamechanger wrote: Charging an additional fee for credit transactions is against all card brand rules. If you get caught, you can lose credit acceptance privileges.
And yet many companies get away with offering a Cash Discount.
Member
Feb 18, 2014
262 posts
60 upvotes
Scote64 wrote: And yet many companies get away with offering a Cash Discount.
Yep, and that’s allowed.
Deal Addict
Jan 21, 2018
4372 posts
4434 upvotes
Vancouver
gamechanger wrote: Yep, and that’s allowed.
Splitting a hair so fine it isn't even there... :)
Member
Feb 18, 2014
262 posts
60 upvotes
Scote64 wrote: Splitting a hair so fine it isn't even there... :)
One is offering a discount, while the other is charging a premium. Not such a fine line...
Deal Addict
Jan 21, 2018
4372 posts
4434 upvotes
Vancouver
gamechanger wrote: One is offering a discount, while the other is charging a premium. Not such a fine line...
You would see the clear distinction then if I were offering a 10% discount to everyone whose RFD name doesn't begin with "ga" and end with "er", rather than charging you a 10% premium.
Member
Feb 18, 2014
262 posts
60 upvotes
Scote64 wrote: You would see the clear distinction then if I were offering a 10% discount to everyone whose RFD name doesn't begin with "ga" and end with "er", rather than charging you a 10% premium.
Yes, I would most certainly see that distinction, and then I’d change my name Smiling Face With Open Mouth

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