What Are Payment Gateway Fees? A Clear Guide for Businesses

If you’re running an online store, a booking site, or any platform that collects money, you’ve likely heard the term payment gateway fees. But what exactly are they—and how much do they really cost your business?

This guide breaks down what payment gateway fees are, what affects them, and how to keep them under control.

What Are Payment Gateway Fees?

Payment gateway fees are the charges you pay to use a service that processes payments. These fees cover the technology that connects your website to banks, card networks, and other payment methods.

When a customer makes a payment, the gateway handles the technical side—securely sending the transaction data, confirming funds, and triggering the transfer. The provider charges you for this service.

Why Do Payment Gateway Fees Exist?

Yet payment gateways are more than just technical middlemen. Behind every transaction, they’re handling a complex mix of tasks, including:

• Data encryption and secure transmission to protect sensitive customer information

• Fraud detection and risk management tools that help reduce chargebacks and protect merchants

• Routing payments through the right channels to maximise approval rates and minimise failures

• Generating real-time reporting, receipts, and reconciliation data to help businesses track transactions and manage accounting

• Delivering a user-friendly checkout experience, whether through hosted pages, APIs, QR codes, or payment links

These systems require constant development, regulatory compliance, and infrastructure costs—including maintaining integrations with banks and card networks, ensuring uptime, and updating software.

Payment gateway fees exist to cover all this work—making sure every payment, from click to confirmation, happens smoothly and securely.

Types of Payment Gateway Fees

Here is a breakdown of different payment gateway costs and charges you may encounter as a merchant.

Setup costs: A one-off charge to configure your payment system—this could include creating a hosted checkout or integrating the API for a custom build. Fees typically range from €0 to €200, depending on complexity.

Ongoing monthly charges: A regular fee to maintain access to the gateway platform. Most providers charge up to €25 per month, depending on the plan and features.

Annual service fees: Covers things like software maintenance, system updates, and customer support. Often billed yearly, especially for enterprise-level support.

Transaction fees: A percentage-based fee taken from each payment processed through the gateway—this is how providers make money per transaction.

Example Breakdown

Let’s say you sell digital courses. You accept a €100 payment. Here’s a possible fee breakdown:

• Transaction fee: 1.5% + €0.25 = €1.75

• Currency conversion: 2% = €2.00

• Payout fee: €0.10

• Total payment gateway fees = €3.85

So, you’d receive €96.15 from the original €100 payment.

What Affects Payment Gateway Fees?

• Industry risk level: High-risk sectors like crypto, gaming, or travel usually pay more due to higher fraud or chargeback potential. Low-risk industries (e.g. books, homeware) often get lower rates.

• Transaction volume: The more payments you process, the more bargaining power you have. Many providers offer volume-based discounts or tiered pricing.

• Payment methods used: Card payments include multiple layered fees (interchange, scheme, provider markup). Methods like pay-by-bank (A2A) avoid card networks and are often cheaper.

• Settlement speed: Faster payouts (same-day or instant) may come with extra fees. Standard settlement times are usually more cost-effective.

• Region and currency: Domestic transactions are generally lower-cost. Cross-border payments often include currency conversion, additional fees, and stricter compliance requirements.

Comparing Payment Gateway Fees

Provider Type	Setup Fee	Monthly Fee	Per Transaction	Payout Fee
Entry-Level	€0	€0	2.9% + €0.30	€0.25
Mid-Market	€50	€29	1.5% + €0.25	€0.10
Enterprise Gateway	Custom	Custom	Custom Rates	Custom

Always read the fine print. Some “low-fee” options may charge more for chargebacks, refunds, or special features.

How to Reduce Payment Gateway Fees

Payment fees add up fast, especially for high-volume or international businesses. But with a few smart changes, you can bring those costs down—without compromising on security or user experience.

Use Local Payment Methods

One of the most effective strategies is to encourage local payment methods over international cards. For example, a UK-based retailer accepting domestic bank transfers or local wallets will typically pay far less per transaction than if customers use US-issued cards.

Local methods also tend to have higher success rates and lower chargeback risks, making them both cheaper and more reliable.

Prioritise Pay-by-Bank

The real game-changer is pay-by-bank (open banking payments). Unlike card payments that pass through multiple intermediaries—each adding their own fee—pay-by-bank moves money directly from your customer’s bank to yours.

That means no interchange, no scheme fees, and no chargebacks.

Consolidate Payment Tools to Avoid Duplicate Fees

Using separate providers for different regions or payment methods can quickly lead to overlapping platform fees, maintenance charges, and operational complexity.

By consolidating with one or two trusted gateways—especially those that support multiple payment types—you can reduce monthly overhead and simplify workflows across your finance and tech teams.

Negotiate Based on Volume and Loyalty

Many businesses don’t realise that payment gateway pricing isn’t always fixed. If you’ve grown your transaction volume or been with a provider for a while, you likely have room to negotiate.

Ask for a custom rate, especially on processing fees. Comparing offers from competitors can also give you leverage when discussing terms.

Audit and Remove Unused Features

Some platforms bundle in features like loyalty programmes, advanced analytics, or marketing add-ons—many of which go unused. While these extras can be valuable for some, they often increase your base fee.

Do a quick audit: are you actually using everything you’re paying for? If not, strip it back to the essentials and keep your costs focused on what drives real value.

Final Thoughts

So, what are payment gateway fees? They’re the costs of turning a customer’s payment into your revenue. And while they vary, they’re essential for any online business accepting digital payments.

Understand what you’re paying for, compare your options, and choose a gateway that supports your goals—without draining your margins.