Understanding Online Payment Fees: Fixed Fees, International Cards, Currency Conversion, and Reverse Invoicing
When you accept online payments, the processor deducts a fee and pays out the rest. The fee is usually a percentage of the payment plus a fixed amount per transaction. This article lays out the basic structure for Stripe and PayPal, explains why the same percentage costs more on small payments, and shows how to work out what to charge.
1. Standard fees (US business, checked on official pages on 2026-10-14)
| Domestic card | International card | If currency conversion is needed | |
|---|---|---|---|
| Stripe | 2.9% + $0.30 | +1.5% | +1% |
| PayPal standard checkout | 3.49% + $0.49 | +1.5% | 3–4% conversion spread |
These are standard rates as shown on the Stripe pricing page and the PayPal fees page at the time of checking. They vary by country, business type, negotiated pricing and payment method, and can change. Other services such as Shopify Payments depend on your plan, so no figures are given here.
2. Small payments have a higher effective rate
The fixed fee is charged per transaction regardless of size, so it weighs more on small payments. For Stripe domestic cards:
- $10 payment: 10 × 2.9% + 0.30 = $0.59 → effective 5.9%
- $100 payment: 100 × 2.9% + 0.30 = $3.20 → effective 3.2%
- $1,000 payment: 1,000 × 2.9% + 0.30 = $29.30 → effective 2.93%
If you sell low-priced items, price them using the effective rate rather than the headline 2.9%.
3. Working backward from the amount you want to receive
To net exactly $100 after fees, you cannot simply charge $100, because the fee itself is also a percentage of what you charge:
Amount to charge = (target amount + fixed fee) ÷ (1 − fee rate)
To net $100 on Stripe with a domestic card: (100 + 0.30) ÷ (1 − 0.029) = about $103.30
Charging $103.30 gives a fee of 103.30 × 2.9% + 0.30 = about $3.30 and a payout of about $100.00. The payment fee calculator on this site uses the same formula.
4. Payments involving currency conversion
If your customer's currency differs from your payout currency, a conversion fee is added. Stripe adds +1% to its standard rate, while PayPal applies a 3–4% spread on the exchange rate, so they are expressed differently. Compare them by the amount you actually receive, not by the headline figures.
5. Costs not in the calculation
- Dispute (chargeback) fees — check each provider's terms for the amount.
- Payout fees and instant-payout fees.
- Taxes, bank fees and exchange-rate movements.