You pay processing fees on the tips your stylists earn. Most salon owners have never done the math.

A salon on Payzium at typical volumes.

• $158/mo

  $15,000 monthly volume. About $1,741 a year less than Square Canada.

• $417/mo

  $35,000 monthly volume. About $3,491 a year less than Square Canada.

• $888/mo

  $75,000 monthly volume. About $7,549 a year less than Square Canada.

• $2,070/mo

  $180,000 monthly volume. About $18,849 a year less than Square Canada.

Math is for 30% Interac, 20% Visa and Mastercard debit, 50% credit, $95 average ticket with 20 percent tipping, 85% card-present. The calculator runs it on your numbers.

Four cost mechanisms every salon and spa pays for.

1. 01

   Tip-on-tip processing

   When a client tips on the card, the tip rides on the same transaction as the service. The merchant account processes the full ticket, including the tip portion, and pays processing fees on the whole thing. Under chair-rental models, the tip is rerouted to the stylist after the salon pays the processing fee. Under commission-split models, the tip is split or paid out gross to the stylist, again after the salon has paid the processing fee on the full amount. Either way, the salon pays processing on income the salon does not keep. At 20 percent average tipping and Square Canada's split rate, a salon doing $40K a month pays roughly $160 a month in processing on tip volume alone, around $1,950 a year. Our base rate is 0.30% on swiped cards plus actual interchange. We do not add a tip-handling surcharge.

2. 02

   Booking-platform processor lock-in

   Vagaro, Mindbody, Fresha, Booker, Phorest, GlossGenius, SalonBiz, and Square Appointments all bundle payment processing into the booking platform. Some lock processing contractually. Most lock it through workflow friction: rebooking, deposit-on-booking, integrated tip pooling, package management, and loyalty programs all run through the integrated payment side. The bundled rates are not negotiable on the booking-platform side. Most are 2.6 to 3.3 percent flat. We have integration paths for most major Canadian salon platforms; we tell you in writing what your specific platform allows before you sign. Some platforms (Fresha, GlossGenius) make processor switching effectively impossible; in those cases we tell you that directly and discuss whether the booking software is worth the bundled processing cost it carries.

3. 03

   Pre-pay and deposit transactions are card-not-present

   A deposit taken at booking is a card-not-present (CNP) transaction. So is a no-show fee charged days later. So is a package purchase processed by phone. All of these price 30 to 60 basis points higher than the same card processed card-present at the service. Salons that have moved heavily to deposit-on-booking are paying CNP rates on a growing percentage of revenue without realizing the deposit costs more to process than the service. Our base rate is 0.40% on keyed and online transactions, plus actual interchange. The cost is higher than card-present, but the gap between our wholesale-plus CNP rate and a flat-rate processor's CNP rate is also wider, which means CNP-heavy salons capture proportionally more savings.

4. 04

   Chair-rental and commission-split merchant-of-record complications

   In chair-rental models, the rental stylist is typically a separate business with their own (or no) merchant account, but the salon often processes transactions on the salon's merchant account for the rental stylist's convenience and to keep client-payment workflows unified. This creates a merchant-of-record question that most salon owners have never formally answered: the salon's account is processing transactions for a service the salon does not actually provide. Most processors do not flag this. Some processors penalize it later (through chargebacks, regulatory review, or terminated accounts) when the structure is discovered. We discuss the merchant-of-record structure on the application and recommend the right account configuration for your specific chair-rental or commission-split arrangement. We do not penalize salons for chair-rental structures; we just make sure the setup is clean.

Three salons. Three switches.

• Toronto, ON
  Full-service hair salon, 6 chairs
  $65,000 per month, commission-split, on Vagaro

  On Square Canada at roughly 2.02%. Paying $1,315 per month on processing.

  On Payzium at 0.30% plus interchange. Paying $751 per month.

  $6,764

  Lower annually
• Calgary, AB
  Day spa, massage and esthetics
  $110,000 per month, heavy package and pre-pay, on Mindbody

  On Square Canada at roughly 2.02%. Paying $2,225 per month on processing.

  On Payzium at 0.30% plus interchange. Paying $1,234 per month.

  $11,885

  Lower annually
• Halifax, NS
  Solo barbershop, 1 chair
  $18,000 per month, on Square Appointments

  On Square Canada at roughly 2.02%. Paying $364 per month on processing.

  On Payzium at 0.30% plus interchange. Paying $184 per month.

  $2,165

  Lower annually

Illustrative composite. Numbers reflect Payzium's published rates and typical salons card mix at the stated volumes. Not a real customer case.

Related verticals.

• Retail
  Brick and mortar

  Debit-heavy mix and the Interac pass-through math.

• Medical
  Independent practices

  Health Spending Account cards and patient-pay-after-visit transactions.