Payment fees are the cost you pay to accept money. Each one is a small percentage, so they're easy to ignore — but across thousands of orders they add up to a real slice of yourtrue profit. Here's how they work and how to keep track of them.
The two kinds of fee
- Processing rate — charged by the payment processor on every card sale, typically a percentage of the order plus a small flat amount (a common online rate looks like "2.9% + 30¢", but the exact numbers depend on your plan and country).
- Transaction fee — an extra fee charged when you use a third-partygateway instead of the platform's own payments. It's usually a small percentage (often 0.5%–2%) on top of the processor's rate, and it disappears if you use the built-in payments.
Why the plan matters
Higher-tier plans usually come with lower processing rates and lower third-party transaction fees. That's the trade-off behind upgrading: a bigger monthly fee in exchange for keeping more of every sale. Whether it's worth it depends entirely on your volume — which you can only judge once you can see fees as a real cost line.
How fees eat your margin
On a $50 order, a 2.9% + 30¢ processing fee is about $1.75 — roughly 3.5% of the order. Add a 1% third-party transaction fee ($0.50) and you're at $2.25, or 4.5%. On a product with a 15% net margin, fees alone are eating almost a third of your profit.
The smaller the order and the thinner the margin, the more the flat 30¢ portion hurts — which is one reason raising average order valuehelps profit twice: more revenue per order and proportionally lower fees.
Fees vs COGS — don't confuse them
Payment fees are not part of COGS. COGS is the cost of the product itself; fees are a selling cost that comes out later, on the way from gross profit to net profit. Keeping them separate is what lets you see both numbers clearly.
Track fees automatically
ProfitVault reads the payment and gateway fees from each order and subtracts them in your profit calculation — so your margins reflect what you actually keep, not what the order total suggests. See the full cost chain intrue profit on Shopify.