How payment gateway fees actually work

Every gateway charges some combination of these five components. Compare on all of them, not just the first.

• Percentage rate — applied to the transaction value.
• Fixed fee — applied per transaction regardless of value.
• International / cross-border surcharge — extra percentage when the card or buyer is outside your home market.
• Currency conversion margin — markup on the FX rate when settling in a different currency.
• Operational fees — refunds, chargebacks, monthly account fees, payout fees.

A fixed fee of 30 cents looks tiny on a $200 transaction (0.15 percent), but on a $5 transaction it is 6 percent — twice the percentage rate itself. If your average order value is low, the fixed fee component dominates your effective rate. Look for providers with a low or zero fixed fee for low-AOV businesses.

Cross-border surcharges typically run 1–1.5 percent on top of the domestic rate. Currency conversion adds another 1–3 percent depending on the provider. For a business with 30 percent international revenue, the combined drag can exceed your headline rate.

If you sell internationally at scale, providers like Wise Business or Adyen can dramatically reduce this cost compared to default Stripe or PayPal — but only if your volume justifies the setup work.

Some providers refund the percentage fee on a refund; others keep it. Some providers charge a per-refund fee on top. If your refund rate is above 3 percent, this becomes material.

Chargebacks usually carry a fixed fee ($15–$25) regardless of outcome, and elevated chargeback rates can lead to higher base rates or account closure. Fraud tooling that prevents chargebacks is often more valuable than 0.1 percent in fee savings.

Run your last three months of payment data through a comparison. If your effective rate is more than 0.5 percent above the cheapest realistic option, switching is usually worth the friction. If it is within 0.3 percent, the cost of migration probably outweighs the saving.