Why is the per-transaction fixed fee so important for small orders?

Processors charge a percentage plus a flat fee per transaction (e.g. 2.9% + $0.30). On a $5 sale the $0.30 flat fee alone is 6% — bigger than the percentage. The smaller your average order value, the more the fixed fee dominates, which is why low-ticket and micro-payment businesses pay a much higher effective rate than the headline percentage suggests.

Are Paddle and Lemon Squeezy more expensive than Stripe?

Per transaction, yes — they typically charge around 5% + $0.50 versus Stripe's 2.9% + $0.30. But Paddle and Lemon Squeezy are Merchants of Record: they handle global sales tax and VAT registration, remittance and invoicing for you. For software and digital goods sold worldwide, that compliance work can be worth the higher fee versus paying an accountant or registering for VAT in many countries.

Payment Fee Calculator — Stripe vs PayPal vs Paddle vs Lemon Squeezy (2026)

How payment fees actually work

Almost every processor charges a percentage of the sale plus a flat fee per transaction — for example Stripe's 2.9% + $0.30. The percentage scales with order value; the flat fee does not. That flat fee is why small orders are punishing: on a $5 sale, $0.30 is already 6% before the percentage is even added. Lower your average order value and your effective rate climbs well above the headline number. Raise it — selling a $500 product — and the flat fee almost disappears and you converge on the raw percentage. Try changing the average order value above and watch the effective % move.

Plain processors vs Merchant of Record

Stripe, PayPal and Square are payment processors: they move the money, and you are responsible for collecting and remitting sales tax / VAT wherever your customers are. Paddle and Lemon Squeezy are Merchants of Record — they legally resell your product, so they charge more (around 5% + $0.50) but handle global tax registration, collection, remittance and invoicing for you. For a digital product sold to customers in dozens of countries, that compliance can easily be worth the extra 2% versus hiring an accountant or registering for VAT abroad. For a domestic business with simple tax, a plain processor is cheaper.

Don't forget the hidden costs

The sticker rate isn't the whole bill. Watch for currency conversion (often +1–2% on cross-border cards — modelled by the card-mix option above), chargeback / dispute fees ($15–$25 each), instant payout fees, and monthly minimums on enterprise plans. If you also pay for the API infrastructure around checkout, model the rest of your stack with the API stack cost calculator, and read more in the API costs that double your bill. Picking a provider from scratch? The API alternatives finder compares payments providers on price, free tier and setup.

Payment fee calculator

Every provider, ranked by what it takes

How payment fees actually work

Plain processors vs Merchant of Record

Don't forget the hidden costs

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