What Is Interac?
Interac is a Canadian interbank network founded in 1984. It's jointly owned by Canada's major financial institutions and operates two primary payment products:
- Interac Debit: In-person debit card payments at POS terminals using chip-and-PIN or tap (Interac Flash)
- Interac e-Transfer: Person-to-person money transfers via email or phone number through online banking
- Interac Online: Online bank-to-bank payments on e-commerce sites (replacing credit cards for purchases)
Interac's network spans every major Canadian bank including RBC, TD, Scotiabank, BMO, CIBC, Desjardins, and most credit unions.
Interac Debit — In-Person Payments
Interac debit is the standard for in-person payments across Canada. Unlike the US where credit cards dominate, Canadian consumers heavily prefer debit. Here's what you need to know:
Interac Flash (Tap-to-Pay)
Interac Flash is Canada's contactless debit payment technology. Customers tap their debit card or mobile wallet (Apple Pay, Google Pay with a linked bank account) to pay — no PIN required for transactions under $250.
All modern Canadian POS terminals support Interac Flash. Older magnetic stripe readers may not — this is a reason to upgrade your hardware.
Interac Debit Processing Fees
Interac debit fees are significantly lower than credit card fees:
| Processor | Interac Debit Fee | Visa Credit (comparison) |
|---|---|---|
| Helcim | ~$0.08 per transaction | IC + 0.15% + $0.06 |
| Moneris | ~$0.08–$0.12/txn | ~2.45% |
| Square | 2.6% (same as credit) | 2.6% |
| Stripe | Not directly available | 2.7% + $0.05 |
| Clover | ~$0.08/txn | 2.3% + $0.10 |
Important: Square does NOT differentiate between credit and debit — you pay 2.6% for Interac debit transactions, same as Visa credit. For high-debit-volume businesses, this is a significant disadvantage vs. Helcim or Moneris.
If Interac matters because you sell both online and in person, use the online + in-person payment stack chooser next. It helps separate merchants who should keep one tidy stack from merchants who are paying too much because they forced one processor into every lane.
Interac Online — E-commerce Payments
Interac Online (also called "Pay by Interac" or "Interac Direct") allows online shoppers to pay directly from their bank account when shopping on websites. The customer is redirected to their bank's secure login, approves the payment, and is returned to the merchant's site. No credit card required.
Why Offer Interac Online?
- Canadian consumer trust: Many Canadians prefer not to enter credit card details online. Interac Online offers familiar, trusted bank authentication.
- Lower fees: Interac Online typically costs $0.25–$1.00 per transaction, vs. 2.9% + $0.30 for credit cards.
- Irrevocable payments: Unlike credit cards, Interac Online payments cannot be charged back by the customer after completion. The funds are irrevocably transferred.
- No fraud chargebacks: Since payments are authenticated through the customer's bank, fraud chargebacks are essentially non-existent.
Processors Supporting Interac Online
- ✅ Helcim — supports Interac Online
- ✅ Moneris eSelect Plus — full Interac Online support
- ✅ Shopify Payments — Interac Online available in checkout
- ⚠️ Stripe — limited/partner implementation
- ❌ Square Online — does not support Interac Online
Interac e-Transfer for Business
Interac e-Transfer is Canada's peer-to-peer payment system used by 250+ financial institutions. While primarily a consumer-to-consumer tool, it has business applications:
- Request Money: Send payment requests to clients via email/phone
- Autodeposit: Enable automatic deposit of received e-Transfers without manual acceptance
- e-Transfer for Business: Available through major Canadian banks with higher limits ($25,000–$100,000 per transaction depending on bank)
Many Canadian service businesses (contractors, freelancers) use e-Transfer as their primary payment method. It's free or low-cost through most Canadian banks and avoids credit card processing fees entirely. The main drawbacks: no automated reconciliation, no refund capability, and higher limits require business banking plans.
Interac Direct Payments (KONEK) — What's New
Interac launched a new open banking payment rail called KONEK (formerly Interac Direct) that enables bank-to-bank payments with near-zero fraud risk. Key features:
- Irrevocable payment — funds transferred immediately, no chargebacks
- Flat fee ~$0.20–$0.50 per transaction regardless of order size
- Customer authenticates via their own bank's app (2FA)
- No card network involved — no interchange fees
For businesses with high average order values (over $200), Interac Direct can save enormous amounts vs. 2–3% credit card fees.
Should Your Business Accept Interac Online?
Yes, if:
- You sell primarily to Canadian customers
- Your average order value is over $100 (fee savings become significant)
- You experience credit card chargebacks (Interac Online eliminates them)
- You want to offer payment options that don't require a credit card
Bottom Line
Every Canadian merchant accepting in-person payments must support Interac debit — full stop. For e-commerce merchants, adding Interac Online as a payment option increases checkout completion rates for Canadian shoppers who prefer bank-based payments. And the irrevocable nature of Interac Online means zero chargebacks — a huge benefit for businesses that struggle with fraud.