What card payments actually cost

Payment fees are quoted as one small percentage and arrive as several. None of the extra ones are hidden, exactly; they are in the published schedule, and almost nobody reads past the headline line.

What the published rates actually say

Taking Stripe's European pricing as the example, because it is public and typical of the structure. As listed at the time of writing, standard cards issued in the European Economic Area are charged at 1.5% plus a small fixed amount per transaction. Premium cards, meaning commercial and some rewards cards, are charged at 2.8% plus the same fixed amount. UK cards and cards issued outside Europe are charged more again, and a currency conversion adds a further percentage on top.

Two things follow that matter more than the exact figures, which you should check for your own country because they change. The rate depends on the card the customer happens to hold, not on anything you control, so your blended rate is a function of your customer mix. And selling internationally costs more per sale than selling domestically, which belongs in the decision about whether to open a market.

The fees that are not in the headline

• Chargeback fees. A disputed payment costs the amount plus a fixed fee, and you pay the fee whether or not you win. Refunding on request is almost always cheaper than contesting.
• Refund handling. Depending on the processor and country, the fixed portion of the original fee may not come back when you refund, so a sale and a full refund can leave you out of pocket.
• Currency conversion, charged as a percentage when you sell or settle in another currency.
• Payout fees and minimum balances, depending on how and where you withdraw.
• Platform transaction fees, where a shop platform charges a percentage for using a processor other than its own. This one is often larger than the processing fee itself.

Local payment methods are not optional

Card coverage is the easy part. In much of Europe a significant share of people pay by bank transfer, by a local wallet, or by instalments, and a checkout that offers only cards simply loses those customers without recording why. Which methods matter depends entirely on the country, so find out what your market uses rather than assuming.

Buy-now-pay-later deserves a separate note. It typically costs several times a card fee and it does raise average order value in many shops, so it can pay for itself. Decide it on the arithmetic for your basket size rather than on either enthusiasm or suspicion.

What to check before launching

1. 01Read your processor's fee schedule for your own country, including the refund and chargeback terms, rather than the global summary page.
2. 02Buy from your own shop with a real card, then refund it, and reconcile exactly what came back.
3. 03Check how long settlement takes. A week between the sale and the money arriving is a cash flow fact, not an inconvenience, when you are buying stock.
4. 04Confirm what happens to the fixed fee on a refund, because it determines whether you can afford a generous returns policy.

Authentication, and the conversion it costs

European online card payments are subject to strong customer authentication, which means the payer confirms the transaction with two or more independent factors: something they know, something they have, and something they are. In practice this is the step where the bank's app or a code interrupts the checkout.

There are exemption categories, including low-value transactions, recurring payments to a trusted payee, and transactions a provider's own risk analysis judges low risk. The exact thresholds sit in the technical standards and have been amended, so check the current text rather than a figure from a blog post.

What matters commercially is that the step exists and that it drops some orders. The useful responses are practical rather than legal.

• Make sure your checkout handles the challenge properly on a phone, including the return journey from a banking app. A customer who gets lost on the way back has paid nothing and may think they have.
• Tell them it is coming. One line saying the bank may ask them to confirm prevents the assumption that something has broken.
• Keep the basket and the entered details if the challenge fails, so a second attempt is one tap rather than a reconstruction.
• Test with a card from each country you sell to, because the experience differs by issuer more than by shop.