Transaction fees and payment markups: the margin quietly leaving your business

The short answer: a lot of business software takes a slice of every payment that runs through it — a per-transaction fee, a platform markup, or a buy-now-pay-later cut you can't adjust. Individually small, these fees add up to a meaningful slice of your margin leaving the business every single month, quietly.

Where does the money actually go?

• •Per-transaction platform fees — a fixed or percentage cut every time a payment is processed through the software, on top of whatever the payment network charges.
• •Payment product markups — the tool's own payment feature, priced above what a lean processor would charge, with the difference kept by the platform.
• •Buy-now-pay-later cuts — BNPL services baked into the checkout that take a markup you often can't adjust or opt out of.
• •Processing on top of subscription — you pay to use the software, and you pay again to take money through it. Two revenue streams for them, two costs for you.

Why is it so easy to miss?

Each fee is small and automatic. You don't write a cheque for it — it's just quietly deducted from every transaction before the money reaches you. Because it never arrives as a bill you have to approve, it's rarely scrutinised. There's no monthly moment where someone looks at it and asks whether it's worth it. But run the percentage across your annual turnover and it's frequently one of the larger costs in your entire software stack. A fee of one or two percent sounds trivial until you multiply it by every sale you make in a year — at which point it can dwarf the subscription you agonised over. This is the same dynamic behind per-seat pricing punishing growth: the cost scales with your success, so the better you do, the more leaves.

Isn't some payment fee unavoidable?

Yes — and it's worth being honest about that. No one can promise "no transaction fees." A payment processor or bank always charges the merchant something to move money; that's the cost of accepting card payments, and it's real. So the goal isn't zero fees, which is a fantasy. The goal is to stop paying more than you have to. What matters is whether there's a platform markup on top of the genuine processing cost, whether you're forced into a specific (pricier) payment product with no alternative, and whether you control how fees are structured and passed on. Those are the parts you can actually win back.

How do you take the margin back?

• •Use lean processing at local rates instead of a marked-up built-in product, so you pay close to the true cost of moving money.
• •Avoid tools that force their own payment product with no option to bring your own processor.
• •Control your own payment terms rather than handing that margin to a third party baked into someone else's software.
• •Do the maths on volume — on high turnover, even a fraction of a percent saved is real money every month, and it compounds every year you keep it.

A system built around how you work can integrate with the payment setup that's cheapest for you, rather than locking you into one that quietly skims the top. That's the difference between renting someone else's checkout and owning your own.

How much could this actually be worth?

Take your annual card turnover and estimate the percentage currently disappearing to platform markups and forced payment products — not the unavoidable processing cost, just the markup on top. For many businesses that figure, once added up, is larger than several of their software subscriptions combined. It's also one of the few software costs where a change flows straight to the bottom line: every dollar of markup you stop paying is a dollar of margin you keep. That makes it one of the highest-leverage things to look at when you review what your stack really costs.

Related reading

• •The real cost of business software — the pillar guide to what software really costs.
• •Total cost of ownership: the software costs you don't see — where transaction fees fit in the full picture.
• •Subscription creep: how software bills grow without you noticing — the other quiet way costs climb.

The honest first step

Work out what percentage of your turnover currently leaves as payment and platform fees — most owners have never added it up in one place. On real volume, it often justifies rethinking how payments run. Software should fit the business, not the other way round.

Tell us what you run, and we'll show you what's possible.