Open a Canadian Merchant Account to Take Advantage of USMCA

Oct 22, 2018

The new trade agreement among the U.S., Canada, and Mexico offers many benefits to online retailers, including no longer requiring shoppers to pay for some cross-border orders.

The new trade deal known as the U.S.-Mexico-Canada Agreement (USMCA) takes on the basic framework of the former North American Free Trade Agreement (NAFTA). It also gives online retailers key benefits.

Changes in Minimum Value for Imported Shipments

Under the agreement, both Mexico and Canada will boost the minimum value of an imported shipment that is subject to duty collection and customs documentation. Mexico is doubling its minimum value threshold to $100 from $50, and Canada is increasing its minimum value threshold to C$40 from C$20.

Changes to Charges on Cross-Border Online Orders

The trade agreement also means that Canadian consumers no longer have pay duty for cross-border online orders that cost less than C$150. Mexican shoppers will not pay duty on cross-border online orders that are the equal to $117 or less. The arrangement essentially makes it simpler for these type of orders to ship among the U.S., Canada, and Mexico.

Smaller and Midsized Businesses Win

Most importantly, it will make it easier for more businesses, specifically smaller ones, to get in on cross-border trade. In many cases, smaller and midsized merchants often do not have the extra funds to pay customs fees and taxes.

Also, merchants entering the markets in Mexico and Canada for the first time will also benefit from paying less to reach customers. For the most part, the U.S.’s express delivery carriers carry many low-value shipments for these type of merchants, so there is a good chance that they will see benefits, such as cheaper costs and greater efficiency, too.

Other Important New Benefits in the Deal

The new trade deal also provides digital product and intellectual property protections.

When it comes to digital products, it bans custom duties on:

  • E-books
  • Videos
  • Music
  • Software
  • Games

Additionally, the digital products clause in the deal ensures that suppliers are not restricted in their use of electronic authentication or electronic signatures. By allowing this, it provides an environment where digital transactions can thrive while also guaranteeing that enforceable consumer protections, such as privacy and unsolicited communications, are applied to the digital product sales.

As for intellectual property, the new trade deal includes much stricter protections for patents and trademarks that encompass all areas of the industry.

In Conclusion

Now, is the best time for online retailers to take advantage of the benefits USMCA has to offer. Start by obtaining a Canadian merchant account so your business can accept and process credit card payments.

When you are ready to apply for a Canadian merchant account, consider a merchant account services provider, like (EMB). It specializes in working with Canadian-based businesses and high-risk businesses, as well as merchants of all types and sizes. EMB is not only a trusted, reliable payment solutions provider, it offers a simple and fast online application process.

Let us help you get a high risk merchant account today!

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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