Gateways charge a blended rate consisting of a percentage of the total transaction volume (e.g., 2.9%) plus a flat, fixed fee per authorization (e.g., $0.30).

This is standard Flat-Rate Pricing. It averages out the varying costs of different credit card networks so the merchant pays one simple, predictable rate.

The true percentage lost to the gateway. Processing a $5 sale at 2.9% + $0.30 yields a $0.44 fee, creating an effective processing rate of 8.8%.

You must force minimum order thresholds (e.g., ‘Minimum cart size $10’) or bundle digital micro-products into larger tiered packages.

A transparent model where the processor passes the exact, raw cost of the credit card network directly to you, plus a tiny fixed markup. Highly lucrative for enterprise volume.

Currently, standard PayPal Digital Checkout generally sits at 3.49% + $0.49 per transaction in the US, making it noticeably more expensive than Stripe’s 2.9% + $0.30.

If a customer uses a non-domestic credit card, gateways automatically apply a cross-border surcharge, typically adding an extra 1.0% to 1.5% to the base fee.

In B2B scenarios, yes via a Convenience Fee. In D2C retail, surcharging causes cart abandonment. It is safer to simply raise your baseline product price to absorb it.

No. If you refund a purchase, you must return the full amount to the buyer, but the gateway keeps the original processing fee.

An alternative where funds are pulled directly from a bank account. ACH fees are typically capped at a flat $5 to $10 max, mandatory for large B2B invoices.

Yes. Card-Present transactions carry less fraud risk, so the network rates and gateway fees are lower than online checkouts.

The standard 2.9% + $0.30 fee applies to every recurring charge. On a $5/month subscription, you lose heavily to that fixed fee monthly.

Using third-party gateways on Shopify penalizes you with an additional 0.5% to 2.0% transaction fee. Shopify Payments avoids this.

Yes, but usually only if you process a high volume of sales (e.g., $50,000+ per month) by contacting enterprise sales.

Yes. Processing fees are considered a necessary business operating expense and are fully tax-deductible.

Gateways typically charge a blended rate consisting of a percentage of the total transaction volume (e.g., 2.9%) plus a flat, fixed fee per successful authorization (e.g., $0.30).

This is standard “Flat-Rate Pricing.” It averages out the varying costs of different credit card networks (Visa vs Amex vs Rewards cards) so the merchant pays one simple, predictable rate without deciphering complex interchange charts.

The effective rate is the true percentage you lost to the gateway. If you process a $5 sale, the $0.30 fixed fee plus 2.9% yields a $0.44 total fee. $0.44 divided by $5 is an effective processing rate of 8.8%, not 2.9%.

You cannot avoid it on standard credit card networks. To survive, you must force minimum order thresholds (e.g., “Minimum cart size $10”) or bundle digital micro-products into larger tiered packages.

A transparent billing model where the processor passes the exact, raw cost of the credit card network (Interchange) directly to you, plus a tiny fixed markup (e.g., Interchange + 0.5% + $0.10). It is highly lucrative for enterprise volume.

Currently, standard PayPal Digital Checkout for e-commerce generally sits at 3.49% + $0.49 per transaction in the US, making it noticeably more expensive than Stripe’s 2.9% + $0.30 for standard processing.

If a customer purchases from outside your home country, or uses a non-domestic credit card, gateways automatically apply a cross-border surcharge, typically adding an extra 1.0% to 1.5% to the base fee.

In many B2B scenarios, yes, you can add a “Credit Card Convenience Fee.” However, in some jurisdictions and retail environments, surcharging is heavily restricted. It is safer to simply raise your baseline product price to absorb it.

No. Both Stripe and PayPal changed their policies; if you refund a $100 purchase, you must return the full $100 to the buyer, but the gateway keeps the original $3.20 processing fee, resulting in a net loss for your business.

An alternative to credit cards where funds are pulled directly from a bank account. Gateways like Stripe offer ACH at drastically lower rates (e.g., 0.8% capped at $5), making it mandatory for massive B2B invoice collection.

No. If a customer files a fraudulent chargeback with their bank, the gateway will immediately deduct the full invoice amount from your account plus a punitive chargeback penalty fee (usually $15.00).

Yes. The gateway charges 2.9% on the absolute Gross Invoice Amount, which mathematically includes any sales tax or shipping fees added at checkout. You pay a fee to process the government’s tax money.

Shopify Payments is white-labeled architecture powered by Stripe. If you use Shopify, utilizing their native gateway prevents them from charging an additional 2.0% third-party transaction penalty.

If a recurring subscription charge declines (insufficient funds), the gateway generally does not charge the percentage fee, but some may still levy a minor network authorization or “Smart Retries” fee.

Once your business reliably processes over $80,000 to $100,000 per month in volume, you possess the leverage to contact Stripe or PayPal enterprise sales and negotiate custom Volume Discount rates.