Published 2026-06-16 · reference numbers, verify before budgeting
Payment fees feel small until you do the year-end math. "2.9% + 30¢" sounds like rounding error — but on real volume it's one of the larger line items a small software or e-commerce business pays, and the gap between the cheapest and most expensive option is bigger than most founders expect. So we ran the numbers, the same way our new payment fee calculator does, on a business taking $10,000 a month.
A typical small shop or SaaS: 200 transactions a month, average order value $50. Here's what each processor takes, using reference 2026 online-card rates:
| Provider | Rate | Fees / mo | Effective % | You keep |
|---|---|---|---|---|
| Stripe | 2.9% + $0.30 | $350 | 3.50% | $9,650 |
| Square (online) | 2.9% + $0.30 | $350 | 3.50% | $9,650 |
| PayPal | 2.99% + $0.49 | $397 | 3.97% | $9,603 |
| Paddle MoR | 5% + $0.50 | $600 | 6.00% | $9,400 |
| Lemon Squeezy MoR | 5% + $0.50 | $600 | 6.00% | $9,400 |
The spread is $350 to $600 a month on identical revenue — that's $3,000 a year between the cheapest and most expensive choice. Stripe and Square come out ahead on raw cost; PayPal's higher fixed fee (49¢ vs 30¢) costs an extra ~$47/month here; Paddle and Lemon Squeezy are visibly more expensive. But the headline rate isn't the whole story — keep reading before you conclude "just use Stripe."
The flat per-transaction fee is the part founders underestimate. Watch what happens if the same $10,000 comes from 2,000 orders of $5 instead of 200 orders of $50 — same revenue, ten times the transactions:
The 30–49¢ flat fee that vanished on a $50 order becomes the dominant cost on a $5 one. This is why micro-payment, tipping and low-ticket businesses bleed on standard card rates, and why bundling (annual plans, larger minimum carts, credit packs) is the single biggest lever on your effective rate. The percentage you actually pay is set by your average order value, not the number on the pricing page.
Paddle and Lemon Squeezy look 70% more expensive — and per transaction, they are. But they're Merchants of Record: they legally resell your product, which means they register for, collect and remit sales tax and VAT in every jurisdiction your customers live in. Stripe and PayPal are plain processors; that global tax compliance is your problem.
For a domestic business with simple tax, that's no benefit and you should take the cheaper processor. But for a digital product sold to customers across the EU, UK, and dozens of US states, VAT/sales-tax registration and filing can cost more in accountant time and risk than the extra ~2% — and getting it wrong is a liability, not just an expense. On our $10k base case the MoR premium is $250/month; if it replaces a tax-compliance setup that would cost more than that, the "expensive" option is actually the cheap one. That trade-off, not the headline rate, is the real decision.
Even the effective rate above is optimistic, because the sticker fee isn't the whole bill:
Our payment fee calculator lets you add a card-mix and refund rate so the effective number is honest rather than the best case. It's the same lesson as the rest of API budgeting — see the hidden API costs that double your bill.
Pick by your actual profile, not the headline percentage: cheapest sticker rate (Stripe/Square) for domestic businesses with healthy order sizes; PayPal where buyers demand it despite the higher fixed fee; a Merchant of Record (Paddle/Lemon Squeezy) for digital products sold worldwide where the +2% buys away your tax headache. And whatever you choose, model it on your real average order value and refund rate before you commit — that's where the surprise lives.
Run your own numbers: Payment Fee Calculator · guides for Stripe, PayPal · Stripe vs PayPal vs Paddle deep-dive.
Figures are reference estimates for standard online card payments (June 2026) and will differ by country, card type, volume and provider plan. Always confirm on each provider's official pricing page.