Guide

How to compare processor fees—use effective rate, not the headline %

“Who has the lower percent?” is often the wrong question. Most card pricing is percent plus a fixed fee. Change the average ticket, and rankings can flip. On small carts, fixed fees dominate.

Indie founders lose hours reading marketing pages that lead with a single percent. That number rarely includes the fixed piece, and it never includes your ticket mix. Fix the ticket first. Then compare.

Bring one real average ticket from last month—or from your launch price list—into the meeting. Without that number, fee debates become brand preference dressed up as math.

Feecut helps you compare at a fixed gross—or reverse from a net target. Illustrative presets—not contracts. We will not stack endless processor name lists or “hundreds of gateways” claims here.

1. Headline % vs effective rate

Headline: the marketed percent (sometimes omitting the fixed fee). Effective rate: fees you actually pay ÷ gross—after the fixed piece.

Agree on a ticket size (or a real distribution), then compare effective rates.

Write both numbers when you discuss fees with a teammate: headline shape and effective rate at a named gross. Without the gross, the conversation is noise.

If someone cites only a percent from a homepage, ask “at what ticket, and does that include the fixed fee?” That one question ends many dead-end threads.

2. Fix average ticket, then compare

Pick your usual charge—or run low / mid / high. Ticket size changes rankings. That’s expected.

Don’t compare across different gross amounts, currencies, or tax-included vs excluded setups and call it science.

If tickets swing a lot, at least price a “lowest common” cart and a “main” cart. Many teams look fine on the main cart and get hurt on trials and add-ons.

A simple indie checklist:

1. Export or estimate your last month’s typical charges (or planned launch prices).
2. Choose three representative gross amounts.
3. Run the same three through each preset you care about.
4. Record estimated net and effective feel—not a winner trophy.
5. Share the three-ticket table with whoever sets list prices—not only with whoever picks the processor.

3. Feecut: same-gross table + forward/reverse

Open Feecut:

• Hold gross constant; switch Stripe / PayPal / Square-style presets.
• Details: FC-1, FC-2.
• On-site table = structure, not a lifetime vendor lock.

Local calc—no upload of your books. [email protected]

After fees, still weigh payout speed, dispute tooling, and what checkout your buyers trust. Lowest fee ≠ lowest ops cost.

If a channel has no universal public schedule, enter custom rates from your contract. Comparing a custom row at the same gross as a card preset is fair. Inventing an “official” rate for that channel is not.

When your mix changes—new cheap add-on, new high-ticket plan—re-run the table. Do not rely on a compare from a different price era.

4. Reverse formula reminder

Gross = (Net + fixed) ÷ (1 − rate)

Decimals for the percent; your dashboard rate for precision.

Use reverse when you need a pocket net and want the list price that roughly gets you there. After you round for marketing, run forward once more so rounding did not erase the margin.

Teams that only ever run forward miss this: sometimes the right move is to set net first, then publish the gross that supports it.

5. WeChat / Alipay: custom rates

Merchant contracts vary. Enter custom rates; don’t invent a universal official schedule. Compare them at the same ticket as card presets.

That same-ticket rule matters more than which logo sits in the table. Different gross amounts turn any compare into fiction.

If you take both cards and local wallets, keep one table with the same three tickets. Separate tables with different tickets invite false winners.

6. Out of scope

Chargebacks, installments, tax ladders, fake FX. Store in-app purchases: Storecut.

Keep processor compares and store-commission compares in separate docs. Blending them into one ranking of “platforms” hides which fee you can actually renegotiate or redesign around.

Re-run the same-gross table when your average ticket moves. A stack that looked fine at a mid price can look worse when you add a cheap add-on SKU. The flip is the fixed fee again—not a mystery change in the headline percent.

If you negotiate a custom rate later, replace the preset with custom numbers and keep the same ticket sizes. That is how you know whether the negotiation moved the needle for your mix.

FAQ

Preset = contract?
No. Why do rankings flip on small tickets? Fixed fee share rises. More processors listed = better? Not necessarily—this page won’t stack name lists. Upload? No.

Related

• Feecut · FC-1 · FC-2 · Storecut

Disclaimer

Illustrative only. Follow processor agreements. [email protected]