Payment Gateway Fees 101: All Costs and Pricing

If you run an online business, you’ll need a great payment gateway to allow you to securely process customer payments. Payment gateways support taking customer payments by card, local payment methods, through invoices and as subscriptions for example, often in both USD and from overseas. But what about payment gateway costs?

This guide looks at the different payment gateway pricing models you might come across, so you’ll know what to look for when you choose one. Plus we’ll quickly touch on Wise Business as a great way to take multi-currency payments directly from customers, through PSPs and marketplace sites.

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What are Payment Gateway Fees?

When you use a provider to support your incoming customer payments, you’ll need to pay various payment gateway fees. Payment gateway charges can include several different types of fees, from set up costs, to monthly fees or per transaction charges. Let’s explore some common fees, so you can choose the best payment gateway for your business.

1. Set up fee

Some providers may charge new customers a payment gateway integration cost or set up fee, to provide onboarding and any hardware required. You’re particularly likely to need to pay a set up fee if you’ll need to take in person payments alongside any online transactions. In this case, the provider may offer you a physical payment terminal, which may standalone or work with your smart device. This will usually have a one time fee to pay.

If you’re being charged a set up fee because you need to take in person payments, it’s worth shopping around for providers which offer payment terminal features which you can simply use on your phone. This avoids the need for an additional piece of hardware - and usually the fee, too.

2. Monthly charges

Payment gateways have varying approaches to fee structures. While some offer a full pay as you go model, there are many which have monthly charges which you’ll pay no matter how frequently you transact.

Some providers offer a hybrid model where you can select different plans, including some with no monthly fees, depending on how often you’ll use them. The higher the monthly fee you pay, the lower the price for processing individual payments in many cases. If you won’t need to take a large volume of payments, choosing a pay as you go service may make sense as you won’t have any ongoing fees to worry about.

3. Payment processing fees

You’ll need to carefully review the payment gateway processing fee for the types of transactions you’ll frequently need to process. While different providers do set their own fees, you’ll typically find fees are different depending on the payment method you’re accepting - for example:

• Local issued debit or credit cards
• International debit or credit cards
• Premium debit or credit cards
• Bank transfers
• Local payment methods
• Buy now, pay later services
• Invoices
• Subscriptions
• Payment links

As the fees for each payment type can vary quite widely, you’ll want to weigh up the costs for the sorts of payment you take often, to make sure the provider you pick presents good value for your specific needs.

4. Currency conversion costs

If you’re using a multi-currency payment gateway, you’ll be able to take payments from abroad, and in foreign currencies. However, there may be additional fees to pay here, for currency conversion, if you’re having the funds deposited into your USD account.

Avoid Extra Fees with Wise Business

While the fee for currency conversion can vary, this is likely to be 1% or more, on top of the processing fees you’re paying. If you’re taking direct payments in foreign currencies, take a look at Wise Business as an alternative option which can allow you to get paid in 8+ currencies with low or no fees.

Receive global payments with ease >>

5. Chargeback and dispute fees

Chargeback and dispute fees may apply if your payment gateway processes a customer payment, and the customer subsequently disputes it. The payment gateway can support in understanding and resolving the situation here, but this is likely to incur a fee to cover the administration involved.

If you end up needing to refund a customer, this is also likely to involve paying a fee to the payment processor to cover costs.

6. Termination fees

Before you sign on the dotted line check what happens if you’re not satisfied with the service. You may need to sign a fixed term contract or pay a termination fee if you change payment gateway within a specific period of time. This can add to the hassle and stress of changing providers, so it’s important to know upfront if it’ll apply to your preferred option.

Factors that Affect Payment Gateway Charges

So - what matters when it comes to payment gateway fees? There are a few common variables which can dictate how much you end up paying - here are some to know about.

Where the payer is located

If you’re taking payments from overseas, the payment processing fee is likely to be higher than taking a domestic payment. International card fees may incur a fee that’s around 1.5% higher than taking a local payment.

If you’re running an ecommerce store, you won’t necessarily know in advance where your customers are based, so choosing a provider with lower international fees makes sense if you often sell internationally.

How the payment is made

Different payment methods also often have different fees. Offering a very broad range of ways for your customers to pay can appeal to a broader selection of people. But it can also expose you to a variety of fees. You may find, for example, that taking payments by bank transfer or invoices is relatively cheap, but using a buy now, pay later provider is more expensive.

Fees vary because the amount of administration, and in some cases, risk, changes depending on the payment method selected. Of course if you want to avoid some particularly expensive methods you can simply not offer them to customers at the checkout.

Optional integrations

Payment providers often work with integrated apps, which can be very handy for you - but is likely to include additional fees. You might want to streamline your operations by integrating your payment gateway with your favorite tools for accounting, banking, revenue protection or tax calculations for example. Any app you choose to integrate with is likely to have their own costs which can vary a lot depending on the services involved.

This saves you manually copying over information from one service to another and can cut down on administration, allowing you to focus on keeping your customers happy instead.

Additional payment gateway services

Aside from the basics of processing customer payments, most payment gateways also have a lot of optional add ons to make managing your business even easier. You may want to add on help with local and global tax, fraud protections, ID screening or tools for accrual accounting for example. Additional costs are likely to apply, the more services you take from your payment gateway.

Save Time and Money On Overseas Payments With Wise Business

Wise Business can help you save big time on international payments. Wise is not a bank, but a Money Services Business (MSB) provider and a smart alternative to banks. The Wise Business account is designed with international business in mind, and makes it easy to receive, send, hold, and manage business funds in 40+ currencies.

In particular, businesses can pay a one-time fee to get local account details in global currencies, such as Euro, USD, GBP, JPY, and more. This means you'll get paid like a local.

Some key features of Wise Business include:

Mid-market rate: Get the mid-market exchange rate with no hidden fees on transfers

Global Account: Send money to 140+ countries and hold balances in multiple currencies, all in one place. You can also get major currency account details for a one-off fee to receive overseas payments like a local

Access to BatchTransfer: Pay up to 1000 invoices in one click. Save time, money, and stress when you make 1000 payments in one click with with BatchTransfer payments

Auto-conversions: Don't like the current currency exchange rate? Set your desired rate, and Wise sends the transfer the moment the rate is met

Free invoicing tool: Generate and send professional invoices

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