Payments
Understanding platform fees and payment processing fees
Two different fees, charged by two different parties, often confused. What each one is, who sets it, and how to compare tools honestly.
By Sulit Suites. Published .
When a client pays A$120 online for a booking, less than A$120 reaches your bank. Two separate things can take a share: the payment processor that moved the money, and the software platform that arranged the booking. They are charged by different companies for different reasons, and treating them as one number makes every comparison wrong.
The processing fee
The payment processor (Stripe, Square, PayPal, a bank's merchant facility) charges for moving money and carrying the risk of fraud and chargebacks. It is usually a percentage plus a few cents per transaction, set by the processor, and it applies whether or not you use any booking software. A platform that "has no fees" still has a processing fee somewhere; the question is whether it is shown to you.
The platform fee
The booking software may charge for its part: a subscription, a per-booking fee, a percentage of payments, or some mix. A percentage platform fee can be a fair way to make a free plan free; it can also be a way to hide the real price of a tool. The honest version is stated as a rate, a threshold and a plan, and refunded when the payment is refunded.
Who holds the money
Some platforms collect payments into their own account and pay you out later; others charge on your own processor account and never hold your funds. The second model means the processor's terms, payout timing and dispute process are between you and the processor, and the platform cannot delay your money.
Working out the real cost
Take a realistic month: number of online payments, average amount, total value. Add the subscription, any per-booking fees, the platform's percentage on the payments it applies to, and the processing fee on everything. Compare that number across tools, not the headline plan price. At low volume a free plan with a small percentage usually wins; at high volume a flat subscription with no platform fee usually does.