Payment processor fees can hamstring a business. Regardless of your business model, when an industry requires you to pay anywhere from 3 to 5 to 6% of all your income on simple processing fees, it’s going to hurt you and cut into your margins. It will be especially painful if the fees are muddled and unclear and it becomes hard to predict how much you’ll pay.
So here’s a handy guide so you understand clearly how much each gateway will charge you.
PayPal, like many of the processing systems we’ll be addressing here, has a quite opaque and complicated payment structure. Their table of fees goes from A1 to A4.7. Charity payments are different from normal payments. Withdrawals to bank are free, but chargebacks aren’t, unless you are protected by their sellers’ protections in which case they are. Sending a private person money is free, unless it’s across a border, in which case it isn’t. Payments depend on borders, and can cost you anywhere from 0.5% to 2% even within Europe, depending on which parts of it you are.
The bottom line is: it depends.
It’s impossible to ascertain how much PayPal will charge you for your transaction unless you know exactly to whom you are selling, where they are, and how they intend on paying. Standard charges are 2.90% plus a fixed fee. But charges if your client uses American Express (3.5%) and Mastercard (1.20% plus a fixed fee) are not the same. Even in a domestic transaction. And if your buyer is outside the country, there are extra fees associated with crossing the border (ranging from 0.5% to 2%). And if they don’t use the same currency as you, there’s a charge for conversion as well (4%). These are all cumulative.
It doesn’t take much for things to add up. If you are in Europe and selling to the US, your PayPal fees will amount to 8.9% of the entire value of the transaction. Plus a fixed fee, which is typically around 30 cents per transaction.
PayPal Mass Pay has a whole different pricing structure which can charge up to 12.5% on conversion fees alone.
And that’s not even considering chargeback fees, which depend entirely on where you are, but go for 16€, $20 or £14 for the EU, the US and the UK respectively, every time someone rescinds their payment, even if the seller did nothing wrong. Companies often lose two to three times the transaction amount on chargebacks.
OK, so PayPal can charge up to almost 10% of your income. Maybe the best way to move money around is to rely on traditional banking and just use wire transfers to pay for goods and services?
Well, if Paypal’s payment structure is opaque, imagine banking, where every institution has a different pricing structure. Luckily, in the EU the situation is a little clearer, since EU law states that banks must treat every transfer in Euros, within the EU, as a domestic transfer. However, as soon as you cross the border and start dealing with clients outside the EU, you will run into the same problems.
Charges to receive money, domestically or internationally, can range from nothing to $20. Charges to send money, domestically or internationally, from nothing to $65. And that’s not even taking into account conversion charges when using different currencies, which can cost wildly varying amounts depending on the banking institution, ranging from $2.50 to $7.50.
And then there’s the hidden fees. Overhead fees. Inter-banking fees. SWIFT tracing fees. These are often not even laid out when you order the service, and are just included in the statement as “other charges”, costing you money without you even knowing where it goes.
At the end of the day, wire transfers are probably the most expensive way you can move money around.
Stripe has simplified things, purportedly. Part of their merchandising revolves around a supposed flat rate of 2.9% plus a fixed amount (30 or 25 cents depending on the country). But how flat is this fee, really?
In Europe, the transaction fee for credit cards is 1.4% plus 25 cents. International payments, however, are 2.9% plus 25 cents.
You also pay an extra 2% for conversion, in case it’s necessary.
So, and returning to our example of a European business selling to the US, you actually pay 4.9% plus 25 cents per transaction.
And that’s not taking into consideration chargebacks, for which Stripe will charge you $15 or 15€ depending on where you are. Chargeback protection will cost you 0.4% of ALL transactions, so if you choose that you could end up paying 5.3% plus a fixed amount for a Stripe transaction, which is almost twice as much as the so-called flat rate.
So how about the money of the future? Why are digital currencies the hottest ecommerce trend for the next few years?
Well, it’s quite simple. With Utrust, you pay a 1% fee per transaction, and that’s it.
We will cut up to 80% off your transaction fees. Simple as it should be. But how about international fees, and borders, and conversion rates, and chargebacks, and all the other hidden fees?
There are none.
- With Utrust, your transaction fees drop by 80%, due to digital currencies being decentralized and cutting out the middleman.
- Utrust is borderless. You can accept payments from anywhere in the world and get paid in your usual currency extremely fast.
- There are no chargebacks. All sales are final and recorded on an immutable ledger.
- There are no conversion fees. You get paid in fiat, in your bank account. No need for digital currencies accounting.
But that’s not all Utrust offers.
Protection against fraud is foolproof
We were built for the Internet. Your customers will never have to share their private information online.
A whole new market
There are over 45 million digital currencies users out there, eager for access to more merchants.
Utrust is easy as it should
With Utrust, integration is just one step away. We provide a custom API that we can tailor to your needs and plugins for major payment platforms like Magento, Woocommerce or Jumpseller.
Now is the time to start accepting digital currencies. Get ahead of the competition and take maximum advantage of the fact that there’s an ecommerce boom happening.
At Utrust, we are aware that it is our job as a payment gateway to help companies succeed and not erode their margins. We are walking the walk.
We are waiving our fees for new businesses who start accepting digital currencies. For three months, you pay 0%.
The money of the future waits for no one, and this untapped market won’t remain that way for long. Head here, join us now, and make sure you don’t miss this opportunity.