The CFO's Guide to Payment Cost Optimisation

A line-by-line walkthrough of your merchant statement and the levers you can pull to lower your effective rate.

The economics of payment rewards programmes are often misunderstood. Interchange funds the points and miles that consumers earn, which means merchants effectively pay for their customers' rewards. Understanding this dynamic is essential for negotiating fair interchange rates.

Industry Context

Canada's payment market is distinctive in several ways. The dominance of Interac debit, the high penetration of contactless payments, the bilingual regulatory environment, and the particular importance of cross-border commerce with the United States all shape the strategic choices available to Canadian merchants and payment businesses.

Fraud losses in Canada continue to climb year over year. Yet many merchants still rely on rule-based systems that were designed for a different threat landscape. The good news is that modern machine learning tools can dramatically reduce false positives while catching more genuine fraud.

What the Data Tells Us

Aggregated industry data consistently shows that businesses with dedicated payment operations functions outperform their peers on authorisation rates, fraud losses, and processing costs. The investment in expertise pays for itself many times over across a typical payment volume.

Open banking represents a fundamental shift in the relationship between financial institutions, technology companies, and consumers. When implemented thoughtfully, it enables richer products, better pricing, and a more competitive market — all of which benefit Canadian businesses.