Working with providers in the payment gateway industry is necessary for powering secure and seamless online transactions. The global payment gateway market was valued at nearly USD 30 billion in 2023 and is expected to grow at more than 19% annually from 2024 to 2032.
When it comes to the payment gateway price, however, a lot of variance can occur in how different providers structure their payment gateway fees.
The cost of payment gateways overall can also depend on numerous factors, with some providers offering more features than others. In certain cases, your payment gateway provider can give you the ability to both accept payments online and complete the payment processing for credit and debit cards.
If you are new to the world of payment gateways, or looking to switch providers, gaining clear oversight of the costs of both the technology and its associated fees is key.
What are payment gateway fees?
Payment gateway fees are paid in exchange for using a gateway solution that allows for easy payment approvals and transfers of funds to your business bank account.
Setting up a payment gateway for either a physical or online business requires careful consideration of the fee structures of each payment gateway provider. The cost of providing payment gateways to merchants includes many technical aspects and precise coding, so many providers charge monthly fees along with additional costs, such as a payment processing charge.
Merchants pay these costs to keep using the gateway technology without having to take on the burden of managing and maintaining it.
How much does it cost to set up a payment gateway?
The true cost of payment gateway fees is highly dependent on multiple different factors, all of which we intend to explore in this guide. Online transaction costs and monthly fees are only a small part of the equation that makes up the sum total of how much really goes into maintaining a payment gateway.
For example, when choosing a payment gateway, you should prioritise solutions that offer lower transaction fees in your specific geographic area. This can help you save on costs while still gaining the critical payment gateway capabilities needed to accept online and digital payments.
If you’re thinking to yourself, “well, why don’t I build my own payment gateway?” we hear you. It can seem much more affordable to build the whole system in-house. But remember that on top of the thousands you’ll spend on development, you’ll also have ongoing maintenance and update expenses.
Opting for a payment gateway solution offered by a third party is almost always the more cost-effective option for merchants operating online.
Payment gateway fees and payment processing costs
Calculating payment gateway fees for your online business starts with comparing different fees associated with gateway and processing services. Your grand total is highly dependent on the provider you choose, so consider your options carefully and choose wisely.
Integration & setup fees
Average cost: £0 to £1000+
Before your online business can start accepting digital payments, you’ll first need to face the music of payment gateway integration charges. These are typically one-time expenses that cover the labor and technical costs of setting up a payment gateway.
Other setup fees you’ll need to consider include bank account and merchant account fees. Both can result in monthly or annual costs to maintain the respective accounts.
Subscription accounts & monthly fees
Average cost: £10 to £50+
When you set up a payment gateway, you usually get the choice between monthly fees in the form of subscription-based fee structures or a pay-per-transaction rate.
Oftentimes, payment gateways offer recurring fees over a pay-as-you-go model to simplify pricing for smaller businesses. If you are considering a monthly subscription option, check with your chosen provider about limits on transaction volume and payment amount to make sure your business qualifies.
You should also look into the cost of recurring payments. For businesses that operate on a subscription-based model especially, finding a provider capable of supporting recurring payments is essential.
Transaction fees
Average cost: 1.5% to 3.5% of each transaction total, plus a flat charge of £0.10 to £0.30
Transaction fees, also called interchange fees, are a per transaction fee applied to every payment that passes through your checkout system. These fees cover the costs of payment processing. The standard structure for a transaction fee is a percentage of the total plus a small fixed charge. However, your payment gateway rates can fluctuate as you expand abroad and into new regions with differing standards.
A payment gateway processing fee is paid to a provider offering both a gateway solution and processing services. Such providers commonly bundle transaction and monthly costs together.
International & currency conversion fees
Average cost: 1% to 3% of the transaction total
When transactions from outside your home borders pass through your payment gateway, you need to be prepared to manage multiple currencies. You’ll need a payment gateway that can handle these currency conversion fees on your behalf, or you can opt to have your bank handle the conversions.
Chargebacks & dispute fees
Average cost: £10 to £100 per chargeback
Most payment gateway providers offer valuable features for managing chargebacks and reducing disputes. Depending on the provider, these capabilities may be included in your monthly costs, or you may have to pay an additional charge to access these services.
Refund fees incurred by chargebacks or disputes cover the interchange costs of sending funds back to a customer after a transaction has already completed. Another important consideration is that the more chargebacks you receive, the higher your fees can become.
ACH, direct debit & wire transfer fees
Average cost: 1% to 3% of the transaction total, plus a flat charge of £0.10 to £0.30
Your payment gateway option of choice should offer more than traditional card payments, such as digital wallet transactions or bank transfers. Most major payment service providers today offer bundled gateway services that can accommodate multiple payment methods, such as ACH, direct debits, and wire transfers.
Payment gateway technology is designed specifically for handling card payments. Support for alternative payment methods like bank transfers is typically an additional service offered by payment gateway providers, but one that can help you avoid the more costly interchange fees associated with cards.
Batch processing & other additional fees
Average cost: Varies depending on features used
Aside from your payment gateway fees, you have access to other payment gateway and payment processing services that can tack on additional fees if and when you use them.
For example, many providers offer batch processing, a method of grouping multiple payments together and processing them all at once rather than individually. Batch processing allows you to pay just one fee rather than a fee for every transaction that passes through your gateway.
Fee summary table
| Fee type | Cost |
| Setup and integration fees | £0 to £1000+ |
| Monthly subscription fees | £10 to £50+ |
| Transaction fees | 1.5% to 3.5% of each transaction total, plus a flat charge of £0.10 to £0.30 |
| Cross-border & currency conversion fees | 1% to 3% of the transaction total |
| Chargeback fees | 1% to 3% per chargeback initially, but percentage can increase exponentially as more chargebacks occur |
| ACH, direct debit & wire transfer fees | 1% to 3% of the transaction total, plus a flat charge of £0.10 to £0.30 |
| Additional feature fees | Varies |
What affects the cost of fees
As previously discussed, the actual cost of payment gateway fees depends on many distinct factors, such as whether you’ve opted into monthly fees or a per-transaction model.
Below is a breakdown of the six main factors that impact payment gateway charges.
Payment gateway integration costs
Payment gateway setup fees can vary drastically from one provider to the next. Some will include it in the overall cost of the solution, while others will have a separate charge for integration and setup. What matters most is the quality of the support you receive throughout this process.
These charges cover the technical work required to connect your checkout system with a provider’s gateway technology. While some companies offer simple plug-and-play solutions at little to no cost, others may require custom development that can reach several hundred dollars. In addition to these initial expenses, you also need to account for ongoing online payment gateway charges, which may vary depending on the level of customisation needed, supported features and compliance requirements.
Transaction volume & average ticket size
How many payments you process on a day-to-day basis has a tremendous influence on your payment gateway costs. Many providers who offer both monthly and per transaction fee models have caps on transaction volume and transaction value.
If you consistently exceed these caps, you need a provider that can offer more customised fee structures and fair transaction fees.
Domestic vs. international transaction processing
Your payments expense sheet will differ depending on whether you process domestic or international payments (or both). A payment gateway provider may charge higher rates for cross-border transactions due to the additional compliance and risk checks that occur.
While almost any payment gateway can enable you to accept cards globally, you’ll always need to account for the costs of currency conversion. Cross-border transactions can also take a longer period to settle, impacting your immediate cash flow.
Thankfully, European financial authorities are working to make international payments smoother. Solutions like SEPA Direct Debit are streamlining the process of account-to-account bank transfers for merchants all throughout the region.
Payment method mix
Your mix of payment methods can potentially increase costs, but also open new opportunities for revenue to flow into your business.
A payment gateway that supports a variety of payment methods beyond traditional cards can help you optimise transaction fees based on which payment methods are best suited to each transaction. Giving customers greater freedom of choice can also encourage increased spending and loyalty, bringing you long-term benefits that might not reflect in your real-time cash flow.
For example, card-based payments often carry percentage-based charges, while local payment methods may involve flat-rate pricing. Aligning your payment method mix with the preferences of your target customers can balance customer convenience with overhead costs.
Business model & risk profile
Your business model and risk profile play a key role in determining your payment gateway fees.
Industries considered high risk can face difficulty when negotiating transaction fees, and businesses may be subject to an unfairly high chargeback rate based solely on their industry. You want a provider that has experience within your industry, especially if it is high-risk, as this is your best path to achieving a seamless payments workflow that keeps your operations running smoothly.
You also must consider the added costs and extra monthly fees that come with add-on services, like batch processing or account updating services. In most cases, the advantages of these services outweigh the costs, but it’s still important to know your upfront expenses nonetheless.
Contract terms & early termination fees
Without a sophisticated payments infrastructure, you can’t just easily switch between gateway providers. Likewise, many payment gateway providers present clients with a contract that includes precise terms of agreement and often stipulations surrounding termination fees.
A termination fee is a charge applied if you stop paying for a payment gateway service before the length of your contract is up. These penalties are often overlooked during negotiations but can significantly increase your overall costs if you ever need to switch gateways. Clear visibility into contract length and early exit clauses is crucial.
How to assess the true cost of a payment processing
Evaluating the real expense of a payment gateway and the associated processing costs takes more than comparing upfront prices.
To get the most accurate picture of the costs ahead, you must look at the entire lifecycle of your payment gateway, from setup to ongoing fees. This means accounting not only for the obvious charges but also for the long-term value the provider delivers in terms of security, reliability and support.
A gateway that appears inexpensive initially may prove more costly in the long run if it restricts growth or introduces inefficiencies at checkout. Similarly, a gateway with all the bells and whistles can run up your monthly costs if your business is not yet ready for growth or international expansion.
Getting to the bottom of the “true” cost of a payment gateway means creating a payments strategy that flows seamlessly and allows you to optimise costs wherever and whenever possible.
Payment gateway total cost calculator tips
When calculating your overall expense, factor in all payment processing fees, such as per-transaction percentages, flat rate charges, interchange rates and chargeback rates.
Understanding how transaction fees accumulate at different volumes is necessary to forecast your future costs accurately. A total cost calculator should include all potential payment gateway fees discussed above to ensure all of your operational bases are covered by the end of the transaction.
Modeling different scenarios can help you plan accordingly and better understand how your gateway will scale as your business grows. Your calculations, paired with tabletop exercises testing out different payment scenarios, can be your ticket to avoiding surprises during critical moments.
Scenario-based example calculations for payment gateways
To illustrate how to calculate your costs, we’ve set up a mock-calculation for a mid-size company in the ecommerce industry:
| Company size | £100.000 per month in sales (£80K domestic, £20K international) |
| Setup and integration fees | Integration cost included in monthly fees. |
| Monthly subscription fees | £15 per month for a premium version of a payment gateway solution |
| Transaction fees | 2.9% + £0,30 per transaction |
| Cross-border & currency conversion fees | 1% of each cross-border transaction |
| Chargeback fees | 1.5% of the refunded transaction |
| Total payment gateway fees | £3,700+ per month (higher with chargebacks) |
Keep this chart in mind as you compare the interchange rates and transaction fees of different providers. If the company in the example above had opted for a gateway provider offering a 2.5% + £0,30 per transaction rate, that small change in percentage can result in thousands saved annually in payment processing costs.
Hidden fees to watch for
Beyond the standard charges, many providers include additional fees that are easy to overlook.
A payment gateway may apply cross-border markups, minimum usage penalties, or specialised service costs. It’s also pertinent to review how refund fees are structured, as some providers charge merchants even when transactions are reversed. Knowing how your payment gateway encrypts data is critical, since security features may come with premium costs.
Key takeaways
Payment gateways and processing costs are a necessary part of any healthy payments ecosystem.
But the fees associated with them don’t need to become a burden.
At payabl., we view payments as an ever-moving goal post. Money is always moving, but you need the right level of control over that movement. We put you in charge of your money’s flow by connecting banking, acquiring and payments into one platform.
As a single source of truth designed to help you operate with confidence, our payment gateway solution helps you uncover and eliminate hidden expenses, all while expanding your portfolio of payment methods and preparing your business to go global.
We’d love to connect and discuss how payabl. can help you gain control of your money flow. Contact us today to get started.