TD Merchant Solutions Interchange Plus vs Flat Rate in 2026: What Canadian Merchants Actually Pay

TD Merchant Solutions offers two main pricing structures. DRAF (Discount Rate/Ad-Valorem Fee) is a flat-rate model providing predictable fees. iPlus (Interchange Plus) is a pass-through model that cuts long-term costs for scaling businesses.

TD classifies its pricing into DRAF and iPlus on internal statements. Flat-rate DRAF structures offer fee predictability for simpler setups, like transactions run through TD Mobile POS or TD Mobile Pay terminals, where interchange rates do not apply. Account setup for flat-rate takes minutes. Establishing an iPlus account takes 1 to 3 days.

Interchange plus prices combine the card network interchange rate with a processor markup. For example, you might pay 2.06% plus $0.15 per transaction alongside a $10 to $20 monthly fee, rather than a flat 2.90% plus $0.30 per transaction. At $10,000 in monthly volume, iPlus saves nearly $90 per month over a 2.90% flat rate. If your Canadian business processes over $100,000 annually, iPlus cuts costs by separating card network fees from processor margins.

Across 15 real statements, we saw businesses on Interchange Plus pay a blended effective rate of 1.87%. By comparing these observed effective rates in Canada, we bring true parity to the conversation around processing costs.

This 1.87% benchmark highlights the practical cost advantage of iPlus over flat-rate models charging roughly 2.90%. Instead of paying a single fixed percentage across all cards, merchants on iPlus pay the exact interchange rate set by Visa Canada and Mastercard Canada, plus TD's processor fee.

Lower network rates on standard consumer cards pull the overall processing cost down substantially. When wholesale card costs drop, iPlus merchants see those savings directly on their monthly statements.

Canadian card network programs reduce interchange rates, lowering total processing costs on Interchange Plus. Flat-rate pricing absorbs these savings, keeping them out of your pocket.

Visa Canada offers a Consumer Electronic Small Merchant rate of 0.77%. Mastercard operates the Mastercard Small Business Interchange Program for merchants processing less than $175,000 annually in Mastercard volume. Merchants processing over $175,000 annually face standard Canada Intracountry Consumer Credit rates.

Flat-rate providers charge a static percentage regardless of network discounts and pocket the difference. TD's iPlus pricing passes these lower network rates directly to the merchant statement. This structure holds true even when examining specialized setups like TD Merchant Solutions vs Square Canada for restaurants. TD confirms final rates at account setup, and merchants can call 1-800-363-1163 for assistance.

High-end premium rewards cards carry higher network interchange fees. These increase processing costs for merchants on Interchange Plus.

Visa CA Infinite Privilege CNP (card-not-present) rates for small merchants reach 2.3%. On iPlus, the processor passes this exact network interchange cost straight to the merchant statement alongside the markup. If you accept a high volume of these cards online, analyzing your recurring billing fees reveals exactly how much premium cards inflate your expenses.

iPlus generates strong savings on standard consumer credit cards. Businesses serving high-end clientele must account for premium card fees. Infinite Privilege cards process at higher cost tiers, though the merchant's overall monthly blended rate generally stays well below flat-rate alternatives.

TD Merchant Solutions passes 100% of Payment Card Network Operator (PCNO) core fees to merchants. Non-fixed contract terms offer a 70-day penalty-free cancellation window following fee increases.

Merchants can cancel their agreement without penalty within 70 days of a domestic PCNO core fee increase or a TD fee hike. This depends entirely on the contract type—fixed-term agreements do not qualify for this window. To avoid unexpected costs, merchants should evaluate how hardware lock-ins and equipment lease fees combine with early termination penalties.

Prepare for upcoming network adjustments, including scheduled interchange rate changes taking effect in October 2026. TD maintains separate interchange documents for Qualifying Small Business Merchants and Non-Qualifying Small Business Merchants. They categorize businesses by the product or service category that generates the majority of their sales.