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Transaction Fees

What are transaction fees?

The transaction fee is the amount of money (usually a fixed percentage/sum) charged per merchant’s transaction by the PSP. If you are a PayPal merchant you are charged 2.8%+30 cents every time someone buys at your website. That is the fixed fee for all the PayPal merchants in the U.S. Different PSPs offer different fees.

What kinds of transaction fees exist?

There are two main types of transaction fees:

  1. A fixed percentage of transactions. For example, 1.2% at PaySpacelv, 2,8% at Stripe. Imagine an entrepreneur John. He uses Stripe and sells a $1000 marketing subscriptions. Every time someone buys a marketing subscription from his website, Stripe charges $28 and John gets all the rest ( $978).
  2. A fixed sum. No matter of product’s price, the fee is a fixed sum. For example, in ACH payment processing, it is usually 60 cents per transaction.

What affects transaction fees?

There are several factors affecting transaction fees:

  • Business types ( high-risk business owners always pay higher fees)
  • GEO
  • Turnover

Some examples of the transaction fees:

Lola said that the transaction fee in that bank country is way too high and does not fit her business needs.

Transaction fees for gambling businesses are higher than for the eCommerce niche.

The merchant refused to work with PayPal due to high transaction fees for African region.

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