In plain words
A payment processing fee is what the card processor charges to take a payment. It is almost always quoted in two parts: a percentage of the amount charged, and a fixed fee per transaction.
The percentage follows the price, so a discount shrinks it. The fixed part does not, so it takes a larger share of a small order than of a large one. The rate itself also varies with the card: international and premium cards often cost more than the rate on the pricing page.
Formula
- Processing fee = amount charged × percentage rate + fixed fee per transaction
Worked example
At 2.9% plus $0.30, the $40.00 bag pays $1.16 and $0.30. The three-bag order at $102.00 pays $2.96 and the same $0.30.
Suppose the processor reports that the bag's order really cost $1.86, as a costlier card would. The engine drops the estimate for the reported fee, and the order's realized profit moves from $17.36 to $16.96.
The example order
A $40.00 bag of coffee, shipped free, every cost counted
2 declared kinds cost nothing on this option
| Step | Grain | Amount |
|---|---|---|
| Revenue | – | $40.00 |
| Cost of goods | per unit | −$12.00 |
| Pick and pack | per order | −$1.18 |
| Packaging | per parcel | −$0.50 |
| Shipping label | per parcel | −$7.50 |
| Card fee per order | per order | −$0.30 |
| Refunds | percent | −$2.00 |
| Card processing | percent | −$1.16 |
| Contribution margin | – | $15.36 |
| 2 kinds costing nothing | – | $0.00 |
Computed by the margin engine in Offer Suite's own code, in whole cents, from a $40.00 bag of coffee with a $12.00 unit cost.
The fee is not charged on the product price alone
The processor takes its percentage of everything it charges the card: products, shipping and, where you collect it, tax. A fee worked out on the product price understates what an order with paid shipping costs to process.
Using it
Use your blended rate, the fees you paid divided by the volume you processed, not the headline rate. Then look at the fixed fee against your smallest orders. On a low-priced first order it can be a visible share of the margin, which is one more reason small orders rarely carry a gift or free shipping.
In Offer Suite
Card fees in Offer Suite are the order's actual payment fee when it was paid through Shopify Payments and Shopify reports it; otherwise an estimate of 2.9% of revenue plus $0.30 per order, which the brand can change. Forecasts use the estimate. The actual-fee read has not yet run on a live Shopify Payments order.
Source: Offer Suite's margin engine.