A transaction fee is money taken out of a sale before it reaches you. It is expressed as a percentage, a fixed amount per order, or both. The words sound simple, but they hide two different charges from two different companies, and only one of them is unavoidable.

It concerns every seller who accepts payment through a platform: a creator selling a $15 template from a link-in-bio page, a coach selling a $400 course, a brand shipping 300 parcels a month. The fee is small per order and large per year, which is exactly why it is easy to ignore and expensive to accept.

What is a transaction fee?

Two separate things are called a transaction fee, and it pays to keep them apart.

The payment processing fee is charged by the payment gateway, meaning Stripe, PayPal or your bank. It covers moving the money, screening fraud, and carrying the security obligations of handling card data. It is typically 1.5% to 3.5% plus a fixed part of $0.25 to $0.50. Every seller pays it, on every platform, because someone has to talk to the card networks.

The platform fee, also called a platform commission or a selling fee, is charged by the tool you sell through. A marketplace, a store builder or a creator platform adds it on top of the processing fee, either as a percentage of the sale, a fixed amount per order, or a percentage that shrinks as you move to a more expensive plan. This fee is a business decision by the platform, not a cost of moving money.

What a transaction fee is not: it is not the monthly subscription of your tool, which is a fixed cost regardless of sales. It is not a currency conversion fee, which only applies when you are paid out in a different currency. And it is not a chargeback fee, which is charged only when a dispute is opened.

Why it matters

A percentage fee is a partner who takes a share of your revenue without sharing your costs. Work through one order and then one year.

A $50 order paid by card through Stripe:

  • Processing fee: 2.9% + $0.30 = $1.45 + $0.30 = $1.75.
  • Platform fee at 5%: $2.50.
  • Total fees: $4.25, or 8.5% of the sale.
  • You receive $45.75.

Now the same order on a platform with no commission: fees are $1.75, you receive $48.25. The difference is $2.50, one coffee. It does not feel like much.

Scale it to 300 orders a month for a year, still at $50 each, which is $180,000 in revenue:

  • Processing fees: 3,600 x $1.75 = $6,300.
  • Platform fee at 5%: $9,000.
  • Total: $15,300.

The $9,000 platform fee is more than the processing cost of every card payment you took all year. It is also more than a $39/month plan costs for nineteen years. And because the platform fee is taken on the gross sale, it applies to the shipping you charged, the tax you collected, and the product cost you have to pay your supplier. On an order with a 40% gross margin ($20 of margin on $50), a 5% commission eats $2.50 of it, meaning one eighth of your actual profit.

How to calculate it

To find what a platform really costs you per order, add both fees and compare against the subscription:

  • Find the processing rate. Check your gateway's pricing page for your country. Note the percentage and the fixed part.
  • Find the platform rate. Read the plan page of your tool carefully. Look for "transaction fee", "commission", "selling fee" or "fee per order", and check whether the rate changes by plan.
  • Compute per order. Fee = (order value x processing %) + fixed part + (order value x platform %).
  • Compute per month. Multiply by your monthly order count. This is the number to compare against a flat subscription.
  • Find the break-even. Subscription price / platform % = the monthly revenue at which a paid plan with 0% commission costs less than a free plan with a commission. At $19/month and 5%, that is $380 in monthly sales. Almost anyone selling seriously is above it.

For cash on delivery, replace the processing fee with the courier's collection fee, usually 2% to 4%, and check whether your platform still charges its commission on orders it did not process. Some do.

Benchmarks and examples

  • Card processing: 1.4% + €0.25 in the EU for local cards, 2.9% + $0.30 in the US, higher for international cards and PayPal.
  • Creator platforms: 5% to 10% platform fee on every sale, sometimes with no subscription. Gumroad-style models sit here.
  • Store builders: 0% to 2% depending on plan, and often 0% only if you use the platform's own payment product.
  • Marketplaces: 8% to 15% for handmade and general goods, up to 30% for app stores and some course marketplaces. The fee buys traffic, which is a different trade.
  • Link-in-bio tools with commerce: 0% to 5%, often with the higher rate on the free tier.

Three concrete situations. A photographer selling $25 preset packs on a 10% creator platform with 120 sales a month pays $300 a month in commission, plus $87 in processing. A candle brand doing $12,000 a month on a 2% store builder pays $240 in commission, about the cost of a mid-tier plan, and gets nothing extra for it. A coach selling one $900 cohort seat a day on a 5% platform pays $1,350 a month in commission, more than a full-time assistant in many countries.

Common mistakes

  • Reading "free plan" as "free". A free plan with a 5% commission costs more than a $19 plan as soon as you sell $380 a month.
  • Blaming the gateway for the platform's cut. Sellers often think Stripe takes 8%. Stripe takes 3%. The other 5% is the platform, and it is negotiable by switching tools.
  • Forgetting the fee applies to gross. Shipping charged to the customer and VAT collected for the state are both inside the amount the commission is taken on.
  • Ignoring fixed fees on small orders. On a $5 sticker, a $0.30 fixed fee is 6% before any percentage applies. Bundle low-priced items or set a minimum order.
  • Not re-checking after growth. A fee structure that made sense at 20 orders a month is often the single largest expense at 300.

Best practices

  • Pick a platform with no commission. The subscription is the price of the tool. A cut of your sales on top is a second price for the same thing.
  • Enable local payment methods. Local cards and wallets carry lower processing fees than international cards. A European store on Stripe pays roughly half the US rate for European cards.
  • Raise the average order value. Fixed fees shrink as a percentage when orders get bigger. A bundle at $60 pays proportionally less than two orders at $30.
  • Price in the customer's currency. It avoids the conversion fee and the hesitation that comes with it.
  • Offer a discount for the cheapest method where it makes sense. In COD markets, a 5% discount for card payment can cost less than the collection fee and the refused-parcel risk.
  • Review your fees quarterly. Export a month of orders, sum every fee line, and divide by revenue. If the number is above 4% and you are not on a marketplace, something is off.

In Roctify

Roctify charges 0% transaction fees on every plan, including the Free plan. Whether you sell from the link-in-bio page or the full store, whether the customer pays by card through Stripe, through PayPal or by cash on delivery, Roctify takes nothing from the sale. The only fee is the payment provider's processing fee, paid to Stripe or PayPal directly, and nothing at all on cash on delivery beyond your courier's charge.

The price of the tool is the subscription: $0 on Free, $19 a month on Creator, $39 a month on Pro. A creator selling $2,000 a month on Free pays Roctify nothing; the same creator on a 5% commission platform would pay $100 a month for the same sales.

FAQ

Is a 0% transaction fee really free?

The platform's part is zero, yes. You still pay the payment provider, because Stripe and PayPal charge for moving money on every platform in the world. On a $50 card payment, expect about $1.75 to go to the gateway. What you avoid is the second layer, the platform's commission on top.

Are transaction fees tax deductible?

In most countries, yes. Processing fees and platform commissions are a cost of doing business and reduce your taxable profit. Keep the monthly statements from your gateway and platform; they are your proof. Ask an accountant for the rules that apply where you are registered.

Should I pass the fee on to the customer?

Adding a surcharge for card payment is banned or restricted in many places, including the EU and several US states. It also hurts conversion. The cleaner approach is to build the fee into your price, then reward the payment method you prefer with a small discount rather than penalizing the one you do not.