Total Payment Cost Model
- Add chargebacks, fraud tools, labor and working capital to your processing fees. Your own all-in cost is what matters
- Model chargebacks from your own dispute count and costs. Keep reversed revenue, fees, lost product and staff time separate so you don't count a loss twice
- Your chargeback fee isn't a fixed $15. Published US fees run $0 to $30. Most charge $15. Square and the Authorize.net gateway charge nothing. Helcim, Shopify Payments and PayPal's standard tier give it back when you win. Put your own number in this model
- Model payment costs against gross margin, not gross revenue. A 5% payment cost on a 20% margin eats a quarter of the margin
- Run this before launch, then again every quarter. Your cost profile shifts as volume and product mix change. Last quarter's numbers won't hold
Every processor rate below was read off the vendor's own pricing page on 2 August 2026, with Stripe's US rates read from a US connection on 4 August 2026. Each one is linked where it's used. The online examples use Braintree's published US card rate of 2.89% + $0.29 (source). Stripe's 2.9% + $0.30 adds 0.0001 × volume + $0.01 × transactions. Rerun each example for your own processor.
Interchange-plus examples use one blended pass-through assumption: 1.03% + $0.178 card-present and 1.50% + $0.172 online. That's interchange of 0.89% + $0.158 and 1.36% + $0.152, plus an assumed 0.14% + $0.02 of network assessments. Neither Visa nor Mastercard publishes that assessment figure. This site carries it as unverified. The card mix, sources and arithmetic are at Cost Model Assumptions. Your own statement beats the assumption every time.
A headline processing rate leaves costs out. Chargebacks, fraud tools, labor and working capital all cost money. Add them to your own budget.
This page shows you how to calculate what you're actually paying.
Why Your Payment Costs Are Higher Than You Think
Start with your own processing fees. Then add the costs below. The worked examples aren't a benchmark for every merchant.
The hidden costs:
- Chargeback fees ($0 to $30 each, depending entirely on your processor)
- Lost product on chargebacks
- Fraud prevention tools (SEON publishes $699/month for 2,500 checks; almost every other vendor won't publish a price at all)
- Chargeback alerts (quoted per merchant, not published)
- Labor (responding to disputes, reviewing fraud)
- Reserves locked up under your own written withholding and release terms
- Working capital cost of 2-3 day settlement delay
Worked example with assumed inputs: $500K/month volume, $75 average order, 0.5% CB ratio, Braintree at 2.89% + $0.29. Chargeback costs below measure out-of-pocket loss against making no sale; reversed revenue and lost margin aren't included. Labor on that line covers dispute responses; the separate labor line excludes them.
- Processing: $16,383 (3.28%)
- Chargebacks: $2,805 (33 disputes at $85 all-in each)
- Tools: $800
- Labor: $1,000 (20 hours/month at $50/hr)
- Working capital: $500 (interest on locked funds)
- Total: $21,488/month (4.30% effective)
In this worked example, that's 43% more than an assumed 3% processing-only budget.
Complete Cost Model Worksheet
Step 1: Processing Fees (Base Cost)
| Your Data | Calculation |
|---|---|
| Monthly volume: $______ | A |
| Processor rate: % + $ | B |
| Average transaction: $______ | C |
| Transaction count: ______ | D = A / C |
Processing fees = (A × B%) + (D × B$)
Example:
- Volume: $500,000
- Rate: 2.89% + $0.29 (Braintree, published, verified 2026-08-02)
- Avg transaction: $75
- Count: 6,667 transactions
- Fees: $14,450 + $1,933 = $16,383 (3.28%)
Run it again with your own processor's published rate. Square's Free-plan online rate is 3.3% + 30c. Same volume, same ticket: $16,500 + $2,000 = $18,500 (published, verified 2026-08-02).
Helcim needs more care. It's interchange-plus, and the markup steps down with monthly volume. Interchange + 0.50% + 25c is the $0-$50K entry tier. A merchant doing $500,000 a month is two bands past it. Helcim's published online schedule puts $500,000 exactly on the line between the $100K-$500K band and the $500K-$1M band. Model both, then ask Helcim which row it applies at the boundary (published, verified 2026-08-02):
| Helcim online band | Percentage markup on $500,000 | Per-transaction markup on 6,667 | Total markup |
|---|---|---|---|
| $100K-$500K: +0.35% + 20c | $1,750 | $1,333 | $3,083 |
| $500K-$1M: +0.25% + 15c | $1,250 | $1,000 | $2,250 |
Add pass-through on top of that markup to get the real bill. On the blended online assumption of 1.50% + $0.172, pass-through here is $7,500 + $1,147 = $8,647. Processing lands at $11,730 (2.35%) on the $100K-$500K band. On the $500K-$1M band it's $10,897 (2.18%). Braintree is $16,383. So the saving is $4,653 to $5,486 a month, and the band question alone is worth $833 of it.
Price a $500K merchant at the entry tier and you overstate Helcim's markup by $1,084 to $1,917 a month. That's the most common way this comparison gets run wrong. Your volume picks the band. Your card mix decides whether interchange-plus actually beats a flat rate. Pass-through is roughly three quarters of the interchange-plus bill at this ticket size. See the card-mix test and Cost Model Assumptions.
Step 2: Chargeback Costs (Often Underestimated)
| Your Data | Calculation |
|---|---|
| Chargeback ratio: ____% | E |
| Chargeback count: ______ | F = (D × E%) |
| Chargeback fee: $______ | G (look it up, see table below) |
| Product cost per CB: $______ | H (actual unrecovered COGS; not the selling price) |
| Shipping cost per CB: $______ | I (unrecovered amount) |
| Labor per CB: $______ | J (hours × hourly cost) |
Chargeback cost per incident = G + H + I + J
Total chargeback cost = F × (G + H + I + J)
This worksheet measures the out-of-pocket loss against making no sale. It doesn't include lost margin. If you start from gross sales and already expense COGS and shipping, subtract reversed revenue plus incremental fees and labor instead. Don't add H and I again. Put response labor here or in Step 4, never both.
G isn't $15 for everyone. It's never $100. These are the published US fees. Every one was read off the vendor's own page on 2026-08-02:
| Processor | Fee per dispute | Refunded if you win? |
|---|---|---|
| Square | $0. "There are no fees for dispute management services for chargebacks" | Nothing to refund |
| Authorize.net | $0.00 on card chargebacks. $25.00 on eCheck.Net | Nothing to refund on cards |
| Helcim | $0 if resolved in your favour, $15 if lost | Yes, by design |
| Braintree | $15.00 | Not stated |
| Shopify Payments | $15.00 in the US | Yes. "If you win the chargeback, then the fee is returned to you" |
| Stripe | $15 to receive, plus $15 to counter | Received fee never returned. Countered fee returned only on an outright win, not a partial one |
| Toast | $15.00 | No. Charged win or lose |
| PayPal standard | $15.00 dispute fee | Yes. Not charged when the case is decided in your favour |
| PayPal high volume | $30.00 dispute fee once your dispute ratio hits 1.5% with 100+ sales in the prior three months | No. The win exemption disappears at this tier |
| PayPal chargeback fee | $20.00, on card transactions only | No. Charged "regardless of whether the buyer is successful" |
| Moneris | CA$25, plus CA$80 authorization chargeback handling | Not stated |
| Stax | $25 with the optional chargeback protection add-on | Not applicable |
| Adyen | Not published | Unknown |
| Clover | Not published | Unknown |
| Worldpay | Not published | Unknown |
| Global Payments | Not published. Says only that "your processor charges you a fee for each chargeback you receive" | Unknown |
| Nuvei | Per contract, on Schedule A of your merchant application | Unknown |
Two rows need reading carefully.
Authorize.net's $0.00 and Shopify's $15 aren't the whole bill. Authorize.net is a gateway. The merchant account behind it charges its own chargeback fee. That fee isn't on Authorize.net's schedule. Shopify says the same thing: "your bank charges a processing fee." Zero at the gateway isn't zero at the merchant.
PayPal's two fees are exclusive, not additive. The $15 (or $30) dispute fee covers transactions through a PayPal account or Guest Checkout. The $20 chargeback fee covers card transactions that went through neither. No PayPal merchant pays $35 on one dispute.
It isn't on any processor's fee schedule. It traces to one undated, unsourced sentence in Adyen's own marketing article: "Every chargeback comes with a fee, typically between $20 and $100 per dispute." Adyen's actual pricing page publishes no dispute fee at all.
Square has every commercial reason to make rivals look expensive. On its own site it puts the range at "$10 to $25". Even that overshoots. The highest published US figure above is $30.
Ranges like "$0 to $35" and "$15-100" circulate for this. Both are laundered vendor marketing, and neither survives the fee schedules.
Nothing in the table goes past $30. Bigger dispute numbers do exist. The networks and the monitoring programs charge those, not your processor:
- Visa arbitration filing fee: USD 600, charged on top of the disputed amount (Adyen docs, read 2026-08-02)
- Diners and Discover arbitration filing fee: USD 500, also on top of the disputed amount (Adyen docs, read 2026-08-02)
- Up to $500 from the networks for contesting a dispute they treat as near-indisputable, meaning Visa 10.1 and 10.2 and Mastercard 4870 and 4871 (Toast, read 2026-08-02)
- VAMP assessments depend on the acquirer's status and the count assessed, which can include TC40 fraud reports as well as TC15 disputes. Ask your acquirer which fee applies and what it passes through. See the program's fee sources
- 30% of the disputed amount on every dispute Stripe's Smart Disputes wins for you (stripe.com/pricing, read 2026-08-02)
Rolling those into a "processor fee" range is exactly how "$15 to $100" got built. Keep them apart and both numbers stay usable.
Example (Braintree, physical goods):
- CB ratio: 0.5%
- CB count: 33 chargebacks
- Fee: $15
- Product lost: $50
- Shipping: $8
- Labor: 0.5 hours × $25/hr = $12.50
- Cost per CB: $15 + $50 + $8 + $12.50 = $85.50
- Total: 33 × $85.50 = $2,821.50/month
The same 33 disputes on PayPal cost $15 each through a PayPal account or Guest Checkout. Other card transactions cost $20 each. The fees don't stack: 33 × $15 = $495 or 33 × $20 = $660. With the same $70.50 product, shipping and labor cost, totals are 33 × $85.50 = $2,821.50 or 33 × $90.50 = $2,986.50, assuming none of those fees is refunded.
Cross PayPal's high-volume line and the picture changes. Hit a 1.5% dispute ratio with 100+ sales in the prior three months and the fee doubles to $30. The win exemption goes away too. Those 33 disputes then cost $990 a month, every one of them, including the ones you win.
On Helcim, if you win two thirds of them, the fee line drops to 11 x $15 = $165 instead of $495. On Square it's $0.
Step 3: Fraud Prevention Tools
| Tool Category | Your Cost | When You Need It |
|---|---|---|
| Processor built-in | Your plan's included features and paid add-ons | Test against your actual losses |
| Dispute alerts | Written quote, including minimums | Compare preventable fees and time saved |
| Fraud detection | Written quote, including screening volume | Compare preventable losses and operating costs |
| Manual review | Hours × hourly cost | Check queue capacity and decisions |
| Analytics | Subscription or internal time | Check which decisions it improves |
Your tool costs: $______ /month
Among the fraud platforms checked on 2026-08-02, SEON lists Starter at $699/month for 2,500 fraud checks, ten users and fifty custom rules. Premium is quote-only. At full use, $699 / 2,500 = about 28 cents a check. Compare each quote on its own included volume and minimum.
Signifyd publishes its pricing model but no numbers. It "charges a percentage of the order total when an order is approved," with "no charge when an order is declined due to fraud" (source). Riskified, Forter, Sardine, Sift, Kount and Accertify publish neither a model nor a rate. Treat every number in the table above as a placeholder until you've got a written quote.
Example ($500K/month):
- Stripe Radar Lite: $0 on standard Payments pricing. US business tiers start at $10/month for Standard, $14 for Plus and $20 for Pro (source, US page checked 22 October 2026). Use your plan's allowance and overage price
- Dispute alerts (Verifi, Ethoca): $400, quoted. Neither provider publishes alert pricing, so get your own quote
- Total: $400/month
Step 4: Labor Costs
| Task | Hours/Month | Rate | Cost |
|---|---|---|---|
| Chargeback responses | CB count × 0.5 hrs | $__/hr | $____ |
| Fraud review | Flagged orders × 0.25 hrs | $__/hr | $____ |
| Reconciliation | 4-8 hrs | $__/hr | $____ |
| Processor management | 2-4 hrs | $__/hr | $____ |
| Reporting/analysis | 2-4 hrs | $__/hr | $____ |
Total labor: $______ /month
Example ($500K/month, 0.5% CB ratio):
- 33 chargebacks × 0.5 hrs × $50/hr = $825
- 100 fraud reviews × 0.25 hrs × $50/hr = $1,250
- Reconciliation: 6 hrs × $50 = $300
- Management: 3 hrs × $50 = $150
- Total: $2,525/month
Step 5: Reserves and Working Capital
| Reserve Type | Calculation | Your Amount |
|---|---|---|
| Rolling reserve | Opening balance + new withholding - releases - applied deductions | $______ locked |
| Fixed reserve | Flat amount | $______ locked |
| Working capital cost | Locked funds × interest rate / 12 | $______ /month |
Example:
- $500K/month × an assumed 10% withholding = $50K newly withheld that month
- If the average locked balance is also $50K, interest cost is $50K × an assumed 8% annual / 12 = $333/month
- Use the release schedule to calculate the balance; several months of withholding can remain locked together
Step 6: Settlement Delay Impact
| Factor | Calculation |
|---|---|
| Average funds in flight | Daily volume × settlement days |
| Monthly opportunity cost | Average funds in flight × annual opportunity cost rate / 12 |
Example:
- Daily volume: $16,667 ($500K / 30 days)
- Settlement: 2 days
- Funds in flight: $33,334 average
- Opportunity cost: 8% annual
- Cost: $222/month (interest on delayed funds)
Your Total Cost Calculation
| Cost Component | Amount | % of Volume |
|---|---|---|
| Processing fees | $______ | ___% |
| Chargeback costs | $______ | ___% |
| Fraud/dispute tools | $______ | ___% |
| Labor | $______ | ___% |
| Working capital cost | $______ | ___% |
| TOTAL MONTHLY COST | $______ | ____% |
| Reserve locked up | $______ | N/A |
Worked Examples by Business Type
Example 1: $100K/Month E-Commerce (Startup)
Assumptions: Chargeback lines in all four examples use the Step 2 no-sale-loss baseline. Separate labor excludes response time already in that line. Reserve balances are assumed average locked amounts, not one month's withholding.
- Volume: $100K/month
- AOV: $60, so 1,667 transactions
- CB ratio: 0.6%, so 10 disputes
- Processor: Braintree at 2.89% + $0.29 (published, verified 2026-08-02). Braintree doesn't publish a monthly fee, so ask
- No paid fraud tools (under $100K)
| Cost Component | Calculation | Amount |
|---|---|---|
| Processing fees | $2,890 + (1,667 × $0.29) | $3,373 |
| Chargebacks | 10 × $85 | $850 |
| Tools | Built-in filters only | $0 |
| Labor | 10 hrs × $50 | $500 |
| Working capital | ($10K reserve + $3.3K in flight) × 8% / 12 | $89 |
| TOTAL | $3,373 + $850 + $0 + $500 + $89 | $4,812 |
| Effective rate | $4,812 / $100,000 | 4.81% |
Budget: About $4,900/month, including the opportunity cost above; $10K reserve locked separately
Check that chargeback line against your own ratio. At 1,667 transactions, 0.6% is 10 disputes.
Example 2: $500K/Month E-Commerce (Growing)
Assumptions:
- Volume: $500K/month
- AOV: $75, so 6,667 transactions
- CB ratio: 0.5%, so 33 disputes
- Processor: Braintree at 2.89% + $0.29, $15 per dispute
- Dispute alerts enabled
| Cost Component | Calculation | Amount |
|---|---|---|
| Processing fees | $14,450 + (6,667 × $0.29) | $16,383 |
| Chargebacks | 33 × $85 | $2,805 |
| Tools | Built-in fraud filters + alerts | $400 |
| Labor | 25 hrs × $50 | $1,250 |
| Reserve | $50K × 8% / 12 | $333 |
| Working capital | $33K × 8% / 12 | $220 |
| TOTAL | $16,383 + $2,805 + $400 + $1,250 + $333 + $220 | $21,391 |
| Effective rate | $21,391 / $500,000 | 4.28% |
Budget: $21.4K/month + $50K reserve locked
Same business on PayPal Checkout (3.49% + $0.49, $15 dispute fee on wallet and Guest Checkout traffic). Processing is $17,450 + $3,267 = $20,717. Chargebacks are 33 × $85 = $2,805. Total: $20,717 + $2,805 + $400 + $1,250 + $333 + $220 = $25,725, an effective 5.15%. That's $4,334 × 12 = about $52,000 a year above Braintree on these inputs. The gap is processing, not the dispute fee.
Example 3: $1M/Month E-Commerce (Scaled)
Assumptions:
- Volume: $1M/month
- AOV: $100, so 10,000 transactions
- CB ratio: 0.4%, so 40 disputes
- Processor: assumed negotiated rate of 2.7% + $0.30. Nobody publishes negotiated pricing. It's a planning assumption, not a verified figure. At this volume you negotiate. Model your own quote
- Full tool stack
| Cost Component | Calculation | Amount |
|---|---|---|
| Processing fees | $27,000 + (10,000 × $0.30) | $30,000 |
| Chargebacks | 40 × $90 | $3,600 |
| Tools | Fraud + alerts + analytics | $3,000 |
| Labor | Full-time ops person | $6,000 |
| Reserve | $100K × 8% / 12 | $667 |
| Working capital | $67K × 8% / 12 | $447 |
| TOTAL | $30,000 + $3,600 + $3,000 + $6,000 + $667 + $447 | $43,714 |
| Effective rate | $43,714 / $1,000,000 | 4.37% |
Budget: About $44K/month, including the $6K monthly salary line above, plus $100K reserve locked
At this volume, price Helcim's published bands too. Exactly $1M a month sits on the boundary between the $500K-$1M online band (interchange + 0.25% + 15c) and the $1M-$5M band (interchange + 0.15% + 15c). Take the more expensive of the two as your base case. Then ask Helcim which row applies.
Take the $500K-$1M band and the blended online pass-through of 1.50% + $0.172 (how that's derived). Pass-through is $15,000 + $1,720 = $16,720. Helcim's markup is $2,500 + $1,500 = $4,000. Processing lands at $20,720, an effective 2.07%. That's $9,280 a month under the assumed negotiated flat rate, with no monthly fee and $0 on disputes you win. On the $1M-$5M band the markup drops to $1,500 + $1,500 = $3,000. Processing lands at $19,720, an effective 1.97%.
Hold that loosely, for two reasons. The $30,000 flat rate it's compared against is assumed, not published. And $1,600 of the $16,720 pass-through is network assessments at 0.14% + $0.02. Neither network publishes that figure. This site carries it as unverified. Pull your own statement before you act on the gap. One more thing: Helcim publishes openly up to $5M a month, so nothing here needs a quote. Custom pricing starts above $5M, not above $1M.
Example 4: $250K/Month Card-Present Retail
Assumptions:
- Volume: $250K/month
- AOV: $45, so 5,556 transactions
- CB ratio: 0.3% (lower for CP), so 17 disputes
- Processor: Square Free plan at 2.6% + 15c (published, verified 2026-08-02)
- Minimal tools
| Cost Component | Calculation | Amount |
|---|---|---|
| Processing fees | $6,500 + (5,556 × $0.15) | $7,333 |
| Chargebacks | 17 × $40 (product + labour only) | $680 |
| Tools | Square built-ins | $0 |
| Labor | 8 hrs × $50 | $400 |
| Reserve | $25K × 8% / 12 | $167 |
| TOTAL | $8,580 | |
| Effective rate | 3.43% |
Budget: $8,600/month + $25K reserve locked
Two things about this example. The fixed fee is 15c, not the 10c a lot of comparison content carries. At this transaction count that's $278 a month. And the chargeback line carries no fee, because Square says outright that it charges none: "There are no fees for dispute management services for chargebacks" (Square Support, read 2026-08-02). Square's Payment Terms still reserve the right to recover associated fees. So that zero is a published policy, not a contractual guarantee.
One more thing about Square. Its fee page invites businesses processing over $250,000 per year to discuss custom pricing. This shop does $250,000 a month, twelve times that annual line. Square also publishes Plus at 2.5% + 15c and Premium at 2.4% + 15c in person. Processing alone is $7,083 and $6,833, against Free's $7,333. Add $49/month per location for Plus or $149 for Premium before calling it a saving. VENDOR Square pricing, checked 22 October 2026.
Same shop on Helcim. The band matters here too. Interchange + 0.40% + 8c is Helcim's $0-$50K entry tier. A shop doing $250,000 a month sits in the published $100K-$500K card-present band at interchange + 0.25% + 7c (published, verified 2026-08-02).
| Line | Calculation | Amount |
|---|---|---|
| Helcim percentage markup | $250,000 × 0.25% | $625 |
| Helcim per-transaction markup | 5,556 × $0.07 | $389 |
| Helcim markup total | $1,014 | |
| Pass-through at 1.03% + $0.178 | $2,575 + $989 | $3,564 |
| Processing | $4,578 |
Against Square's $7,333 that's $2,755 a month, or about $33,100 a year, for the same sales. Two caveats. The pass-through line is a blended assumption for a card-present mix, not your statement. And $461 of it is the unverified network assessment component (method and sources). Helcim's markup is the only part of that table you can trust without a statement, because Helcim publishes it. The gap also turns on ticket size, not just volume. In the $100K-$500K band, Helcim overtakes Square's Free plan above a $7.42 ticket. In Helcim's entry band the crossover is $9.23. A $45 average ticket clears both. A $6 coffee shop lands on the other side. See the card-mix test.
Hidden Costs Breakdown
The Fee Is the Smallest Part of a Chargeback
$15 is the right number for most processors. It's also the cheapest line in the list.
| Cost Component | Your Amount |
|---|---|
| Chargeback fee | Your provider's applicable fee; see the verified table above |
| Lost product | Actual unrecovered COGS, for the no-sale-loss baseline |
| Shipping cost | Actual unrecovered shipping, on the same baseline |
| Labor to respond | Response hours × hourly cost |
| Ratio impact | Applicable assessment or explicitly labelled stress assumption |
| Total per chargeback | Sum those amounts once |
Assumed digital case on Braintree, excluding reversed revenue: $15 fee + $10 labor = $25 Assumed physical case on Braintree, no-sale-loss baseline: $15 fee + $50 product + $10 shipping + $15 labor = $90 Same physical order on PayPal: $15 in fees + $50 + $10 + $15 = $90, or $95 if it's a card transaction at $20 Same physical order on PayPal, high-volume tier: $30 in fees + $50 + $10 + $15 = $105, and you pay it even when you win Same physical order on Helcim, dispute won: $0 in fees + $15 labor = $15, and you keep the sale Same physical order on Square: $0 in fees + $50 + $10 + $15 = $75
The Stripe case is worth its own line. Stripe charges $15 to receive a dispute and $15 more to counter it. The received fee never comes back. The countered fee comes back only on an outright win. On a partial win you get neither. So fight and partly win, and you're out $30 either way (source, verified 2026-08-02). Model that before you fight small disputes on Stripe.
Reserve Working Capital Cost
$50K locked in rolling reserve at 8% cost of capital:
- Annual cost: $50K × 8% = $4,000
- Monthly cost: $333
Assumed 10% withholding, before releases or deductions:
- $100K/month volume × 10% = $10K newly withheld per month
- $500K/month volume × 10% = $50K newly withheld per month
- $1M/month volume × 10% = $100K newly withheld per month
- Add prior withholding still held, then subtract releases and deductions to get the locked balance
That's real money. It can't buy inventory, payroll or growth.
Budget Planning Template
Monthly Operating Budget
Worked budget template for the $500K/month example, with assumed costs:
| Category | Amount | Notes |
|---|---|---|
| Processing fees | $16,400 | 3.28% effective at 2.89% + $0.29, $75 ticket |
| Chargeback costs | $2,000-3,500 | Depends on CB ratio and which processor you're on |
| Tools | $400-1,000 | Dispute alerts minimum |
| Labor | $1,000-2,500 | Part-time or contract |
| Working capital | $300-600 | Reserve + settlement |
| TOTAL | $20,100-$24,000 | 4.0-4.8% of volume |
One-Time Setup Costs
Use your own written quotes below. These ranges are illustrative budget inputs, not market benchmarks.
| Item | Cost | When |
|---|---|---|
| Processor integration | $2,000-10,000 | Initial setup |
| Terminal hardware | $0-2,000 | If card-present |
| Fraud tool setup | $500-2,000 | One-time |
| Legal review | $1,000-5,000 | Contracts, terms |
Reserve/Locked Capital
| Type | Amount | Duration |
|---|---|---|
| Initial reserve | Your written amount | Your written release terms |
| Rolling reserve | Prior balance + withholding - releases - deductions | Your written rolling schedule |
| Chargeback reserve | Variable | If high ratio |
Total locked: $______ (plan for this in working capital)
Cost by Business Model
Subscription SaaS
| Monthly Volume | Build your own total | Effective Rate | Reserve |
|---|---|---|---|
| $50K | Use the worksheet above | Your total / your volume | Use your written terms |
| $250K | Use the worksheet above | Your total / your volume | Use your written terms |
| $1M | Use the worksheet above | Your total / your volume | Use your written terms |
Higher costs because:
- Card-on-file rates are higher. Square bills stored cards at 3.5% + 15c, the same as keyed entry. A normal online sale is 2.9% + 30c (source, verified 2026-08-02)
- More dunning labor
- Subscription dispute risk
Physical Goods E-Commerce
| Monthly Volume | Build your own total | Effective Rate | Reserve |
|---|---|---|---|
| $100K | Use the worksheet above | Your total / your volume | Use your written terms |
| $500K | Use the worksheet above | Your total / your volume | Use your written terms |
| $2M | Use the worksheet above | Your total / your volume | Use your written terms |
Higher costs because:
- Physical chargebacks lose product + shipping
- Returns management
- More fraud risk (shipping fraud)
Digital Goods / Downloads
| Monthly Volume | Build your own total | Effective Rate | Reserve |
|---|---|---|---|
| $100K | Use the worksheet above | Your total / your volume | Use your written terms |
| $500K | Use the worksheet above | Your total / your volume | Use your written terms |
| $1M | Use the worksheet above | Your total / your volume | Use your written terms |
Lower costs because:
- No product lost on chargebacks
- Lower shipping/logistics
- But fraud risk is higher (need tools)
Card-Present Retail
| Monthly Volume | Build your own total | Effective Rate | Reserve |
|---|---|---|---|
| $100K | Use the worksheet above | Your total / your volume | Use your written terms |
| $500K | Use the worksheet above | Your total / your volume | Use your written terms |
| $1M | Use the worksheet above | Your total / your volume | Use your written terms |
Lower costs because:
- Lower processing fees. Square's Free plan is 2.6% + 15c in person against 3.3% + 30c online. Helcim's card-present markup is lower than its online markup at every band: 0.40% + 8c against 0.50% + 25c in the entry tier, 0.25% + 7c against 0.35% + 20c at $100K-$500K a month
- Measure your own card-present chargebacks separately from online sales
- Less fraud
- Minimal tools needed
Card-present fixed fees vary by provider and country. Shopify's US pricing page lists 10c in person on Basic, Grow, Advanced and Plus; its Canadian card lists 0c CAD. VENDOR Shopify pricing, checked 22 October 2026. Stax lists 8c, Helcim starts at 8c and steps down to 7c and 6c, and Square charges 15c.
Test to Run
Week 1: Gather data
- Pull 3 months of processor statements
- Count chargebacks, calculate average cost (fee + product + shipping)
- List all tools you pay for (fraud, disputes, analytics)
- Estimate hours spent on payment ops
Week 2: Calculate 4. Processing fees: $_______ 5. Chargeback costs: $_______ 6. Tools: $_______ 7. Labor: $_______ (hours × rate) 8. Working capital: $_______ 9. Total: $_______
Week 3: Compare 10. Effective rate: Total / Volume = ____% 11. Compare all-in cost with processing fees on the same statements 12. Explain the difference line by line
Success criteria: You've got your true all-in cost. Budget from that, not from a guess.
Scale Callout
Under $100K/month:
- Build your all-in budget from the worksheet
- Calculate processing's share from your own fees
- Calculate chargebacks' share from your dispute count and costs
- Tools = minimal
- Reserve: use the balance and release dates in your agreement
$100K-$500K/month:
- Rebuild the budget from your current statements and quotes
- Calculate processing's share from your own fees
- Calculate chargebacks' share from your dispute count and costs
- Include tools at their quoted cost
- Reserve: use the balance and release dates in your agreement
$500K-$1M/month:
- Rebuild the budget as staffing and tools change
- Calculate processing's share from your own fees
- Calculate chargebacks' share from your dispute count and costs
- Include tools at their quoted cost
- Labor = dedicated person
- Reserve: use the balance and release dates in your agreement
Over $1M/month:
- Compare all-in costs across processors on the same transaction mix
- Calculate processing's share from your own fees
- Calculate chargebacks' share from your dispute count and costs
- Include tools at their quoted cost
- Labor = full-time team
- Reserve: use the balance and release dates in your agreement
Where This Breaks
-
High chargeback businesses: Recalculate costs at your actual dispute count and at a worse one. Compare the result with processing fees rather than assuming the two will be equal.
-
High-risk industries: Get the actual reserve percentage, holding period and release schedule in writing. Model the resulting locked balance.
-
Low-margin businesses: Worked example: a 4.5% all-in payment cost uses 30% of a 15% gross margin, before other costs. Run your own margin and cost inputs before deciding whether the business is viable.
-
Seasonal businesses: Check whether reserve terms follow peak sales or a fixed balance. For a stress example, assume $200K stays locked while sales fall to $50K a month, then model the cash gap.
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Multi-processor strategies: Running two processors doubles some costs (reconciliation, tool integrations, labor).
Next Steps
Planning a new business?
- Use this worksheet to calculate total payment costs
- Add to your business model viability analysis
- Ensure unit economics work AFTER payment costs
Existing business, surprised by costs?
- Calculate your true all-in cost
- Identify biggest cost component
- Optimize:
- High processing fees → Negotiate rates
- High chargeback costs → Reduce chargebacks
- High tool costs → Audit tool ROI
Trying to reduce costs?
- Switch processors only when matched quotes show savings that cover switching and ongoing costs
- Reduce chargebacks - bigger ROI than fee negotiation
- Optimize auth rates - declining orders is hidden cost
See Also
- Business Model Viability - Is your business model viable with payment costs?
- Processor Fees Guide - Understanding fee structures
- Money Held or Frozen - Cash flow impact
- Chargeback Metrics - True cost of chargebacks
- Tool Stack by Tier - What tools to buy when
- Processor Comparison - Finding lowest cost
- Cost Model Assumptions - The blended interchange figure behind every comparison here, and how it was derived
- Reading Statements - Understanding actual costs