Signing up for an online payment processor feels a bit like choosing a cell phone plan: you think you know what you’re getting until you spot those sneaky extra charges at the end of the month. As we’ve helped countless small businesses set up their payment systems, we’ve witnessed how quickly unexpected fees can chip away at profits and complicate cash flow.
Here’s the inside scoop on hidden fees and how you can sidestep them to find the payment solution that truly fits your business.
Payment processor fees to understand
Beyond the typical transaction fees (usually around 2.9% + $0.30), many platforms charge additional fees depending on how you use them. These may not be obvious when you sign up.
Common fees include:
- Chargeback fees: If a customer disputes a charge, you could be charged $15–$25 per case—even if you win.
- Instant payout fees: Want your money same-day? Stripe and PayPal charge ~1.5% extra for that.
- Currency conversion fees: Selling internationally? Expect 1%–3% added when converting currency.
- Cross-border fees: Even if a customer pays in your currency, processing a non-domestic card may trigger an extra 1% fee.
- Platform fees: Some platforms (like Shopify) may charge additional transaction fees unless you use their in-house solution.
These fees can add up fast, especially if you run a subscription business or process high volume.
| Provider | Best For | Monthly Fee | Transaction Fee | Pros | Cons |
|---|---|---|---|---|---|
| Stripe | Online businesses with flexible needs | None | 2.9% + $0.30 | Customizable, international support, subscriptions | No phone support, no native POS |
| PayPal | Quick setup & trusted checkout | None | 2.9% + $0.30 | Familiar brand, Venmo support, easy invoicing | Redirects checkout flow unless customized |
| Square | Selling both in-person & online | None | 2.9% + $0.30 | Unified POS + online sales, invoicing, fast deposits | Limited international support, higher keyed-in fees |
| Authorize.net | Businesses with merchant accounts | $25 | 2.9% + $0.30 | ACH & recurring billing, strong support | Monthly fee, technical setup required |
| Shopify | Full-featured online stores | $39 (Shopify plan) | 2.9% + $0.30 | All-in-one platform, lower fees on higher plans | Requires full Shopify plan, even for minimal use |
Compare instant vs standard payouts
Most processors offer free next-day or 2-day payouts, yet many businesses prefer instant payouts for improved cash flow. However, the additional 1%–1.5% per transfer can significantly impact your bottom line over time. Unless instant access is essential, consider batching payouts or sticking to the standard schedule.
Watch out for chargebacks and dispute resolution
Chargebacks aren’t just frustrating: they’re expensive. Besides the immediate fee, some platforms may hold a portion of your balance if your chargeback rate rises. Without solid proof of delivery or service quality, you risk losing both the product and payment.
To reduce chargebacks:
- Use clear product descriptions and refund policies
- Send confirmations and tracking info
- Use fraud protection tools (most providers offer them)
Understand international fees and limitations
Even if your processor “supports multiple currencies,” they may charge hidden fees for conversion, or delay transfers for foreign payments.
Platforms like PayPal and Stripe charge currency conversion + cross-border fees on top of standard transaction costs. If your audience is global, make sure to check:
- Are prices displayed in local currency?
- Who handles the currency conversion?
- Can you receive and hold funds in multiple currencies?
Also verify if customer support and legal protections are available in your clients’ countries.
Avoid double fees from platforms and gateways
If you’re using a platform like Shopify, Wix, or Squarespace, and you don’t use their built-in payment solution (like Shopify Payments), you could get charged double—once by the gateway (e.g. Stripe) and once by the platform.
Always read the fine print. In many cases, using the native processor removes the extra transaction fee (often ~1%).
Choose a provider that fits your real needs
Understanding fees upfront empowers you to select a provider wisely. Some processors bundle key features such as fraud prevention and multi-currency support without extra charges.
Our approach is to match clients with processors based on actual business needs—not just headline rates. What’s perfect for a subscription service might not be the best for a local retailer.
If you’re unsure, start with a flat-rate, no-monthly-fee provider and scale up as your volume grows.
Learn more about choosing the right provider
If you’re just getting started, check out our article on how to choose the right payment processor for your business.
