Financial Reporting

Payment Processing Fees

Fees charged by payment providers (Stripe, PayPal, Shopify Payments) per transaction — typically 2.4-2.9% + $0.30.

Formula

Fee = (Transaction Amount × Percentage Rate) + Fixed Fee

What are Payment Processing Fees?

Payment processing fees are charges from your payment gateway for each transaction. They typically include a percentage of the transaction value plus a fixed per-transaction fee.

Typical Rates

Stripe/Shopify Payments: 2.9% + $0.30
PayPal: 2.9% + $0.30 (varies by volume)
Square: 2.6% + $0.10
International cards: Additional 1-1.5%

Impact on Margins

On a $30 order, a 2.9% + $0.30 fee costs $1.17 (3.9% of revenue). On low-value items, the fixed fee becomes a significant margin killer.

Example

Order: $50. Rate: 2.9% + $0.30. Fee = ($50 × 0.029) + $0.30 = $1.75 (3.5% of order value).

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