All businesses incur transaction fees when a customer’s credit card payment is processed, reducing the money earned per sale.
But transaction fees can hurt ecommerce businesses even more.
Platforms like Shopify, Etsy, Wix, and Squarespace add transaction fees onto your sales, cutting into your hard-earned profits.
Navigating through the world of transaction fees is a messy endeavor, so this article breaks down Shopify transaction fees, along with other popular platforms like Squarespace, Wix, and more.
Keep reading to learn about:
- How ecommerce transaction fees work
- Ebay transaction fees
- Etsy transaction fees
- Shopify transaction fees
- Wix transaction fees
- Squarespace transaction fees
- Weebly transaction fees
- WordPress transaction fees
- Other considerations beyond ecommerce transaction fees
- Ecommerce transaction fee FAQs
And see if there are better ecommerce platform options for your business.
How Ecommerce Transaction Fees Work
Two standard fees occur during a sale: processor fees and transaction fees.
A processor fee, also known as a processor payment or credit card processing payment, is the charge from the credit card processor, like PayPal, Stripe, or Intuit. It acts as an intermediary between your business and a customer’s credit card company.
A transaction fee is the amount of each sale transaction paid via credit card and can vary depending on the ecommerce platform, subscription plan, type of product, and more. Essentially, a transaction fee is like a commission set by the ecommerce platform your business utilizes.
Comparing Ecommerce Transaction Fees
eBay Transaction Fee
eBay’s transaction fees are known as “final value fees.” The final value fee covers the total amount of the sale, including the item cost, shipping and handling costs, sales tax, and any additional applicable fees. Businesses incur extra fees depending on the type of products the customer purchases.
Except for athletic shoes over $100, all products cost the seller an additional $0.30 per order. Final value fees range between 0.5% and 15% depending on the category and the total amount of the sale.
Most product categories charge 12.55% of the sale up to $7,500 calculated per item and an additional 2.35% for the sale portion greater than $7,500.
So if your business sells a high-priced product for $8,000, the fees on the item are $941.25 (12.55% of $7,500) plus $11.75 (2.35% of $500).
Each fee adds up.
Related reading: Ecommerce Platform vs. Marketplace: Moving to Your Own Site >>
Etsy Transaction Fee
Etsy’s transaction fees recently increased to a 6.5% transaction fee on the sale price, including shipping. However, if your business utilizes the Etsy Payments feature, that will be an additional processing fee of 3% of the sale price plus $0.25.
So, for example, a product that costs $10 that the customer pays via Etsy Payments will generate $1.05 in transaction fees, which is over 10% of the cost of the item sold.
- Bypass “Selling on Etsy Fees” with StoreBuilder
- Etsy Alternatives: 6 Reasons To Launch Your Own Online Store
Shopify Transaction Fee
Does Shopify charge a transaction fee? Yes, they do. Shopify transaction fees charge your business 0.5% to 2% for making a sale, and the plan subscription determines the percent.
The Shopify Payments feature, which incorporates Shopify’s own payment gateway, eliminates transaction fees.
However, if you do not utilize Shopify Payments, an additional transaction fee of 2.4% to 2.9% plus $0.30 is added per transaction.
Shopify Payments may sound ideal, but Shopify can hold your funds at its discretion. It is only available in 17 countries and businesses like cryptocurrency, Internet gaming, telehealth services, and cannabis-related businesses, amongst others, are ineligible from using the feature.
Related reading: Shopify: Is It The Best Option For Your Online Store? >>
Wix Transaction Fees
You may be wondering, Does Wix charge transaction fees?
While Wix charges the standard processing fees of 2.9% plus $0.30 of the sale for credit card payments, it does not currently charge any additional transaction fees.
Squarespace Transaction Fee
Squarespace charges both processor and transaction fees.
The Squarespace Website Business plan charges a 3% transaction fee on order totals (including shipping), while the Commerce Basic and Commerce Advanced plans do not charge transaction fees.
Related reading: Should I Switch From Squarespace to WordPress? 9 Considerations >>
Weebly Transaction Fees
Weebly charges a 3% transaction fee for its Free, Starter, and Pro plans, but no transaction fees are incurred for its Business plan.
WordPress Ecommerce Transaction Fees
A major benefit here is that the open source ecommerce platform WordPress does not charge any transaction fees. Processing fees depend on the card processor.
Other Considerations Beyond Ecommerce Transaction Fees
Transaction fees are not the only important factor to take into consideration when starting an ecommerce business.
Keep in mind that if you choose one of the proprietary solutions, such as Shopify, your data is no longer yours, and you cannot take it with you should you decide to run your store on a different platform. If you choose to move, rebuilding your entire shop will be necessary.
WordPress and WooCommerce provide the most customizations, templates, scalability, and flexibility out of the mentioned solutions, as well as a robust assortment of plugins and integrations to help you manage your website. Plus, your data is truly yours.
Ecommerce Transaction Fee FAQs
Does Shopify Charge a Transaction Fee?
Yes. Shopify transaction fees range from 2% on its Basic plan, 1% on Shopify plan, and 0.5% on its Advanced plan.
What is Shopify Payments Fee?
Shopify Payments is Shopify’s payment gateway. It eliminates Shopify transaction fees but still charges credit card processing fees ranging from 2.4% to 2.9% plus $0.30 per transaction.
Does Wix Charge Transaction Fees?
Yes. Wix uses the industry-standard processing fee of 2.9% of the sale amount plus $0.30.
Does WordPress Charge a Transaction Fee?
No. There are no transaction fees for using the WordPress platform.
Is There a Transaction Fee for WooCommerce?
No. There are no transaction fees for using the WooCommerce platform.
How to Avoid WordPress Ecommerce Transaction Fees
While WordPress avoids charging customers transaction fees, there are still credit card processing fees. Those are universal costs that all online businesses and sellers are required to pay, right?
These plugins to your WooCommerce store allow customers to remain on your website. WooCommerce Payments is a payment solution that has no hidden setup costs or monthly fees.
Try Fully Managed WooCommerce Hosting from Nexcess
Avoid Wix, Squarespace, and Shopify transaction fees and go with a fee-free solution: WooCommerce.
Your website's best bet not to incur fees is with a WooCommerce online store on WordPress. Fortunately, neither WordPress nor WooCommerce charges transaction fees, so you won’t be losing money from each sale.
And if you do decide to open a WooCommerce online store, consider hosting with Nexcess.
Fully managed WooCommerce hosting from Nexcess comes with a robust selection of online payment methods, along with smart monitoring, which sends alerts for sales trends, customer checkout problems, and if your site experiences slow loading times. It also comes with cart abandonment technology and advanced analytics to help understand the habits of your website visitors and customers.
Don’t let other ecommerce providers take their cut from your hard-earned profits while providing a lackluster shopping experience for customers and rigid website creation for your business.
Instead, stick with WooCommerce, where your profits are your own and your creativity knows no bounds.