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A plain-English breakdown of every type of payment processing fee — transaction fees, interchange, chargebacks, and more — so you know what you are paying and why.

Payment processing fees can seem like a jumble of percentages, flat charges, and mysterious line items. This guide explains each type so you understand exactly where your money is going.

Quick summary

Most businesses pay a per-transaction fee (a percentage plus a flat amount) on each successful sale. With all-in-one processors like Stripe and PayPal, this single fee covers everything. You may also encounter fees for disputes, international cards, currency conversion and instant payouts. Stripe's standard pricing has no monthly fee, and PayPal charges none for its standard checkout products — though some optional PayPal products do carry one. Rates change, so check the current rate on your processor's pricing page.

The main fee types

Transaction fees

This is the fee you pay on each successful payment. It is typically made up of two components:

A percentage of the sale amount
A flat amount per transaction

Stripe's standard US rate is 2.9% + 30¢ per successful transaction on domestic cards. On a $50 sale at that rate the fee is $1.75, and you net $48.25. Always check stripe.com/pricing for the current rate — PayPal's rates are different again, and both vary by country and by the payment method the customer chooses.

Transaction fees are deducted automatically from your payout — you never see a separate invoice.

Interchange fees

Interchange is the fee that moves between the banks on each card transaction — it goes to the bank that issued your customer's card. Visa is explicit that merchants do not pay interchange directly: you negotiate and pay a "merchant discount" to your provider, usually a percentage per transaction, and interchange is already inside it. With an all-in-one processor you never see interchange as a separate line.

At high transaction volumes, some businesses switch to "interchange-plus" pricing, where interchange is passed through at cost and the processor charges a separate markup on top. Stripe offers custom pricing, including interchange-plus, to businesses with large processing volumes.

Monthly fees

Many processors — especially traditional ones — charge a monthly account fee or gateway fee. Stripe's standard pricing does not. In Stripe's own words: "Stripe does not charge setup fees, monthly fees, or any other hidden fees like closure fees." PayPal charges no monthly fee for its standard checkout and card products either, but several of its optional products (Payments Advanced, Payments Pro, recurring billing tools) do carry a monthly fee — check PayPal's fee schedule before you switch one on.

Some premium features (a paid Stripe Radar plan for custom fraud rules, Stripe Sigma for custom reports, and similar) are priced separately as optional add-ons.

Chargeback fees

When a customer disputes a charge and initiates a chargeback through their bank, your processor charges a dispute fee. Stripe charges a fee for every dispute you receive, whichever way it goes, and a second fee if you respond to it manually — that second one comes back to you if you win and does not if you lose. PayPal charges its own chargeback and dispute fees, set by the currency of the transaction. Check each processor's fee schedule for the amounts, which change.

See Chargebacks & disputes explained for details on the dispute process.

International and currency conversion fees

If your customer's card was issued in another country, most processors add a surcharge on top of the standard rate. Stripe's standard US pricing adds 1.5% for international cards and a further 1% if currency conversion is required. PayPal applies its own additional percentage for international commercial transactions, which varies by market.

Instant payout fees

If you need funds in your bank faster than the standard schedule, processors like Stripe offer instant payouts for an extra fee. Stripe's standard pricing charges 1.5% of the Instant Payouts amount, with a minimum fee of 50¢. Check stripe.com/pricing for the current rate before you rely on it.

Refund fees

Issuing a refund returns the customer's money. Stripe does not charge a fee to issue a refund on card payments, but the processing fee from the original transaction is not returned to you either — so a refunded sale still costs you the original fee. Bank-transfer refunds can attract a fee. Check your processor's refund policy for specifics.

Fee comparison at a glance

Fee type	Stripe (US standard pricing)	PayPal (US)	Notes
Standard transaction	2.9% + 30¢	3.49% + fixed fee for PayPal Checkout; 2.99% + fixed fee for standard card payments	Per successful charge
Manually entered card	+0.5%	Check current rates	When you key the card in yourself
International card	+1.5%	Additional percentage, varies by market	On top of standard rate
Currency conversion	+1%	Varies	When converting currencies
Instant payout	1.5%, minimum 50¢	Varies	Optional fast transfer
Chargeback / dispute	Fee per dispute received, plus a fee if you respond manually	Chargeback and dispute fees, set by currency	The fee for receiving a dispute applies either way
Monthly account	None on standard pricing	None on standard products; some optional products charge one	Add-on features cost extra
Refund processing	No fee on card refunds, but the original fee is not returned	Check current policy	Customer refunded in full

Rates change — always verify

Fee structures are updated periodically. The rates above are general guides. Always check your processor's current pricing page or your account's fee schedule for the exact rates that apply to you.

How fees affect pricing

It is worth building processing fees into your pricing. If you charge $100 for a service and pay $3.20 in fees (Stripe's 2.9% + 30¢ on a domestic card), your net is $96.80. Many businesses round prices up slightly to absorb fees without thinking about them on every transaction.

For high-volume businesses, even small differences in fee rates add up significantly. A 0.2% difference on $500,000 in annual sales is $1,000.

Common questions

Can I pass fees on to my customers?

Sometimes, but the card networks set rules for it and some US states restrict it. Visa, for example, requires merchants to notify their acquirer 30 days before they start surcharging, and publishes signage rules for telling customers. This is a decision that requires careful consideration — many businesses absorb fees rather than risk friction at checkout. Talk to us if you are considering this, and check the current Visa and Mastercard rules plus your own state's law before you switch it on.

Are fees tax-deductible?

Payment processing fees are generally a deductible business expense. Talk to your accountant to confirm how they apply to your specific situation.

Why did my fee rate seem higher on one transaction than another?

Several factors affect the effective rate on individual transactions. With Stripe, an international card adds 1.5%, currency conversion adds 1%, and a card you key in manually adds 0.5%. The payment method matters too: Stripe prices buy-now-pay-later and bank debits on their own schedules rather than at the card rate.

What is 'interchange-plus' pricing?

Interchange-plus pricing separates the interchange fee (what moves between the banks) from the processor's markup. Stripe lists "IC+ pricing" as part of the custom package it designs for businesses with large payments volume or unusual business models. Flat-rate pricing is simpler and is what most small businesses use. If you think your volume has reached the point where it is worth asking, talk to your processor's sales team — they will tell you whether you qualify.

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Payment fees explained