Understanding Payment Gateway Fees
Payment processing fees are the "silent killer" of e-commerce profit margins. Without tracking the exact amount a gateway takes per transaction, sellers often over-spend on marketing campaigns thinking they have more cash flow than they actually do.
The Percentage + Fixed Fee Structure
Almost all modern payment processors (like Stripe, PayPal, and Shopify Payments) use a hybrid fee structure. For example, Stripe standard pricing in the US is 2.9% + $0.30 per successful card charge.
- The Percentage (2.9%): This scales with the order size. It pays for the risk of fraud, interchange fees to the credit card networks (Visa/Mastercard), and the processor's margin.
- The Fixed Fee ($0.30): This is a flat rate charged per transaction, regardless of size. It covers the computational and network costs of authorizing the payment.
Why "Effective Rate" Matters More
If you sell a high-ticket item for $1,000, the $0.30 fixed fee is meaningless; your effective fee rate is basically 2.93%. However, if you sell a $5 micro-product, that $0.30 fixed fee suddenly becomes devastating. Your total fee is $0.445, meaning your effective fee rate shoots up to nearly 9%!
Use the calculator above to monitor your Effective Fee Rate. If you sell low-cost items and your effective rate exceeds 5%, you must either raise prices or switch to a processor offering "micropayment" fee structures.