If you've called around for processing quotes lately, you've probably heard all three terms — sometimes used interchangeably, sometimes used wrong. They're not the same. They're three distinct pricing models, with three different ways of presenting the cost to the customer, and three different rule sets in Canada.
I get asked some version of "which one should I use?" every week. The honest answer is: it depends on your industry, your average ticket, what province you're in, and how often you actually want to explain pricing to a customer. Let's go model by model.
The 30-second version
- Surcharging: List one price. Add the fee on top when the customer pays with credit. Easy to set up, but Quebec doesn't allow it and customers often feel "charged extra" at checkout.
- Cash discount: List the card price. Give cash payers a discount off it. Legal everywhere in Canada including Quebec. Sometimes confusing because the "discount" only shows up after the transaction starts.
- Dual pricing: Show two prices upfront — one for cash, one for card. Customer picks. Cleanest model. Legal everywhere. Best for higher-ticket businesses and trades.
Now the details.
Model 1: Surcharging
Surcharging
List one price. Add a surcharge on top when the customer pays with credit. Customer pays the processing fee. You pay nothing on the credit transaction.
How it shows up at checkout
How it actually works: Your listed prices stay the same. When a customer pays with a credit card, the terminal adds a percentage on top — up to 2.4% as of 2026 — and that surcharge covers your processing cost. You receive the listed price net. The customer pays the listed price plus the surcharge.
Where it works best: Higher-ticket businesses where customers don't blink at a small surcharge — auto repair, trades, professional services, B2B invoicing. Industries where the alternative (eating a 3% fee on a $3,000 ticket) costs you $90 a transaction.
Where it doesn't work: Quebec — outright restricted under the Consumer Protection Act. Also generally a bad fit for low-ticket retail, restaurants, and cafés where customers are price-sensitive on every transaction. A $0.10 surcharge on a $4 coffee will tank your reviews fast.
What you have to do: Register your surcharging program with Visa and Mastercard (Dough handles this), post signs at every entrance and till, disclose the surcharge before the customer pays, and itemize the surcharge as a separate line on the receipt. It's regulated. Get the paperwork right.
Worth knowing: the 2.4% surcharge cap is actually the lower of two numbers — 2.4% or your actual cost of acceptance. If your real interchange + processor cost is 1.8%, you can only surcharge 1.8%. Most processors just default everyone to 2.4% because most card mixes hit that ceiling.
For deeper detail on the rules, registration, and signage, the surcharging Canada pillar guide goes through it line by line.
Model 2: Cash discount
Cash discount
List the card price as your default. Cash customers receive a discount off the listed price. Functionally similar to surcharging — different legal framing.
How it shows up at checkout
How it actually works: You raise your listed prices by approximately the cost of processing. Customers who pay with cash get a discount applied at the register that brings them back to the original price. Customers who pay with card pay the listed (higher) price.
The legal framing: Card brands and Canadian consumer law don't restrict discounts the same way they restrict surcharges. So cash discount is technically a "promotional pricing program" rather than a fee — which is why it works in Quebec where surcharging doesn't.
Where it works best: Quebec merchants who can't surcharge. Businesses that already see meaningful cash volume (laundromats, food trucks, some cafés, certain retail). Industries where saying "10% off for cash" sounds friendlier than "we're adding a fee."
Where it gets awkward: Customers sometimes feel duped when they realize the "listed price" is actually the inflated card price. The framing matters. Done well, it feels like a cash perk. Done poorly, it feels like you raised prices and called it a discount.
The cash discount program guide covers the full setup — pricing recalculations, signage, training your staff to apply the discount correctly at the till.
Model 3: Dual pricing
Dual pricing
Display two prices on every product or service — one for cash, one for card. Customer sees both upfront, picks at checkout. The cleanest, most transparent model.
How it shows up on a menu or invoice
How it actually works: Every price on your menu, your invoice, your quote sheet, your website — shows two amounts. One for cash. One for card. The customer picks before the transaction starts, not after. Your terminal is programmed to charge the right amount based on the payment method.
Why owners like it: No surprise. No reframing of "discount" vs "surcharge." Customers know exactly what they're paying before they hand over the payment method. It's the model that generates the fewest complaints and the fewest awkward conversations at the till.
Where it works best: Quoted/invoiced businesses (trades, contractors, agencies, B2B), restaurants with printed menus, auto repair shops with written estimates, any business where prices are presented before the transaction. Heather at Serenity Valley Medi Spa runs dual pricing for exactly this reason — clients see both prices on their treatment menu before booking.
Where it gets clunky: Pure retail with hundreds of price tags. Reprinting tags or shelf labels with two prices each is a non-starter for some stores. In those cases, surcharging or cash discount is easier.
The dual pricing Canada guide walks through setup, terminal programming, signage, and the operational details.
Side by side
| Surcharging | Cash discount | Dual pricing | |
|---|---|---|---|
| Customer experience | "Fee added at checkout" | "Discount for paying cash" | "Two prices, you choose" |
| Legal in Quebec | No | Yes | Yes |
| Legal in rest of Canada | Yes | Yes | Yes |
| Applies to debit? | No — credit only | Debit gets discount | Your choice |
| Maximum fee/discount | 2.4% capped | No cap — set by you | No cap — set by you |
| Registration with card brands required | Yes (Dough handles) | No | No |
| Best for low-ticket retail / cafés | No — feels nickel-and-dime | Sometimes | No — too many price tags |
| Best for high-ticket trades / auto / B2B | Strong fit | Good fit | Strongest fit |
| Customer transparency | Medium | Medium-low | Highest |
| Signage / disclosure required | Yes | Yes | Yes (built into pricing display) |
Which one should you actually pick?
Forget the legal frameworks for a second. The right model usually comes down to four questions:
- Where do you operate? If you're in Quebec, surcharging is out. Pick cash discount or dual pricing.
- What's your average ticket? Under $30, customers will resent any fee at the till — Boost-funded perks and lower IC+ pricing make more sense than any of these three models. Over $300, all three models work, and dual pricing tends to be the cleanest.
- How do you present prices? If you give written estimates or quotes (trades, B2B, services), dual pricing is the most natural fit — both prices live on the quote sheet. If you have shelf tags on hundreds of SKUs, surcharging or cash discount is easier operationally.
- How much does the customer experience matter? Dual pricing leaves zero room for surprise — the customer sees both prices before the transaction starts. Surcharging and cash discount both reveal the cost differential at the till, which sometimes catches customers off guard.
The quick decision framework
Pick surcharging if...
- You're NOT in Quebec
- Average ticket is $100+
- You're already using a terminal and want minimal operational change
- You're in auto repair, trades, or professional services
- Your customers are used to "the credit card fee"
Pick cash discount if...
- You ARE in Quebec (surcharging not allowed)
- You already see meaningful cash volume
- You want the option to discount both cash AND debit
- You operate a laundromat, food truck, or some retail
- The "discount for cash" framing feels more on-brand than "surcharge"
Pick dual pricing if...
- You give written quotes, estimates, or invoices
- You want maximum customer transparency
- You're in trades, B2B, auto repair, or services with a printed menu
- You operate in Quebec OR want flexibility for multi-province growth
- You hate explaining fees at the till
The plot twist: you might not need any of them
Surcharging, cash discount, and dual pricing all answer the same question: "How do I avoid eating 3% on every credit card transaction?"
There's a fourth answer that owners often overlook — Interchange Plus pricing. Instead of pushing the fee onto the customer, you simply pay way less of it. The math works out to roughly:
- Flat rate or tiered pricing (Square, Stripe, Moneris): you pay ~2.7-3.2% effective rate
- Interchange Plus (Dough IC+): you pay interchange + 0.20% — typically ~1.9-2.1% effective rate
- Surcharging / cash discount / dual pricing: customer covers the credit card fee, you pay $0 on credit (just debit at $0.04 per transaction)
For some merchants — particularly lower-ticket retail, salons, cafés — IC+ ends up being a better fit than any of the three "shift the fee" models because it preserves a clean, single-price customer experience while still cutting the bill in half.
For higher-ticket businesses (auto repair, trades, B2B, professional services), one of the three shift-the-fee models almost always wins on math.
This is why Dough offers all three pricing models plus dual pricing / cash discount as options — different businesses need different models. There's no single right answer.
Common questions
Can I switch models later?
Yes. Switching from one model to another within Dough is a short call and a terminal reprogram — usually done in a single day. We see merchants start on surcharging, decide their retail customers don't like it, and move to dual pricing. Or start on IC+, scale up to higher tickets, and move to surcharging.
Do I have to apply the surcharge to every transaction?
No. You can choose to absorb the surcharge on specific transactions if you want (a loyalty customer, a partner business, an emergency repair). Just be consistent enough that your signage still accurately describes the program.
What about American Express?
You can surcharge on AmEx too — same rules, same cap. Cash discount and dual pricing apply to AmEx the same way they apply to Visa and Mastercard.
Will customers complain?
Some will, at first. Most stop after a month or two. The complaint rate is highest when the model isn't explained clearly at the till. Signs at the entrance, a clear line on the receipt, and one practiced sentence from your staff ("We charge a small fee for credit — debit and cash are at the listed price") covers 90% of friction.
What if I'm already surcharging and want to know if it's set up right?
Send us your last statement and a photo of your POS receipt. We'll check that (a) your surcharge is properly disclosed, (b) the rate is within the 2.4% cap, (c) it's not being applied to debit, and (d) you're getting the full benefit (some processors quietly pocket part of the surcharge).
The TL;DR
- Surcharging: add a fee at checkout. Legal in 12/13 provinces (not Quebec). Capped at 2.4%. Best for high-ticket businesses like auto repair, trades, and B2B.
- Cash discount: raise listed prices, discount cash payers. Legal everywhere in Canada including Quebec. Best for businesses with meaningful cash volume or Quebec operations.
- Dual pricing: show two prices on everything, customer picks. Legal everywhere. Most transparent model. Best for quoted/invoiced businesses, trades, and B2B.
- None of these apply to debit. Debit transactions process at a flat $0.04 per transaction either way.
- If your tickets are under $30, you probably don't want any of these. Look at Interchange Plus instead — it cuts your fees in half without shifting any cost to the customer.
- You can switch models anytime. Single call, single terminal reprogram, usually done in a day.
Zachary at Dough
Founder of Dough Payments. The "which model fits my business" question is the single most common one I get — partly because the industry uses these terms inconsistently. The answer is almost always sitting in your monthly statement plus your average ticket size. Send me both and I'll tell you which one your numbers point to.