An e-commerce site operator that handles multiple payment methods can use a payment agent, allowing them to sign a single contract to support all the options they offer.

However, since there are various fees for using an agent, it is important to check them in advance.

This article explains the types of fees and charges that arise when using a payment agent as well as the market rates for their services.

What’s in this article?

• What are the fees for payment agent services?
  
• Types of fees for payment agent services
  
• Handling fees and prices for payment agents
  
• Determining the best payment agent for you
  

What are the fees for payment agent services?

The two of the following are the main types of fees required for using a payment agent service: basic usage fees (initial and monthly fees) and fees at the time of payment (payment processing and cancellation fees).

Although it’s common to find agents that offer basic usage without a fee, they might charge higher processing fees. It’s advisable to discuss the actual costs with the agent.

Cases where only the payment processing and cancellation fees are required

In some cases, the processing company will cover the cost of the payment system and initial services, such as conducting screenings with the appropriate payment institutions and setting up the transaction environment.

As fees are only assessed when payments occur, and there are no fixed expenses such as setup charges or monthly usage fees, this structure allows you to keep initial costs down when building your business. Relatively small-scale businesses (such as sole proprietors), startups aiming to grow quickly, and major global companies use these same pricing structures.

Nevertheless, the payment fee amount depends on revenue, so they increase as sales increase. As a result, these costs might eat into profits and put downward pressure on your bottom line. To avoid such risks, it’s important to keep your earnings and budget in mind while considering different payment agents.

As many payment processing companies have a standard rate for their transaction fees, you need to be able to calculate your planned running costs if you know how much you can sell.

Unless you’re taking advantage of a specific sales offer, agent services will charge the above payment processing and cancellation fees.

Agents charging other expenses, such as initial costs and monthly usage fees

Companies that can afford to allocate a certain budget to initial costs or handle relatively expensive products and services tend to use these payment agents. Agents that charge preliminary costs and monthly usage fees often have expandable payment processing functions and excellent support systems to bring you targeted advice.

Additionally, after negotiating an estimated price, you and the agent service will agree on the initial and the monthly fixed costs, so you might be able to reduce your expenses during negotiations.

Still, the initial costs you incur before the business begins making sales could be a burden. It can also take time between the original application for the service and the completion of system construction and installation. Therefore, when you begin looking into using a payment agent, make sure you plan and leave plenty of leeway in your schedule and budget.

In addition to the costs described above, a payment agent could charge a transaction fee, which we will explain in more detail later.

Depending on the agent, there might be cases where there is no preliminary cost, and you will only need to pay a monthly usage fee, or there might be cases where there is no transaction fee. Each company has a different pricing plan. As such, we recommend that you request a quote and check the details of the actual costs involved.

Types of fees for payment agent services

The main types of fees you can expect when setting up a payment agent service are as follows:

• Initial costs
  The appropriate payment institutions will usually need to perform screening to enable you to incorporate a transaction system into your business, and you will need to prepare a payment environment. The initial expense paid to the processing company mainly covers development costs associated with introducing different methods and fees for screening procedures and contracts with each institution.

• Monthly usage fee
  The monthly usage fee is a fixed charge you pay every month, regardless of whether your customers use the provided options. The payment agent service uses this to cover system usage and the costs of managing customer information, including credit card details. Furthermore, if you accept transactions in a physical store, this will include the price of leasing the terminal. This monthly usage fee might vary depending on the type of payment methods you introduce, depending on how the agent configures its services.

• Transaction fee
  The transaction fee represents the cost of transferring payment data. For example, in the case of an e-commerce site, to complete a purchase, the agent must first process the payment based on the data sent from the site and then forward it to the relevant payment institution. This fee covers that process. You incur a fixed charge for each payment, regardless of the amount. Hence, the fee will increase as the number of transactions increases.

• Payment handling fee
  Payment handling fees are incurred for each transaction. You pay these to credit card companies, convenience stores, and other payment institutions through the agent. The settlement fee rate varies depending on the payment method and the sales amount, so it will increase or decrease depending on the price of the product or service.

• Cancellation fee
  The cancellation fee is charged by the agent service for processing refunds when a customer mistakenly buys an item or encounters a problem and wants to reverse the purchase. You incur this charge for each cancellation, so a higher number of such transactions leads to increased costs. Although this might not occur very often, it is a good idea to check the price in advance.

• Bank transfer fee
  When you use a payment agent, your sales proceeds will be transferred to a designated bank account after transactions are completed. Bank transfers often bundle a large number of revenue, as transferring funds each time a sale is made sustains additional expenses. The transfer fee will vary depending on the amount and the frequency of transfers, but some payment processing companies also offer free bank transfers.

Handling fees and prices for payment agents

The fees payment agents charge vary depending on the type of transaction and the processing company. However, the following are market rates for payment processing services:

Market rates for various fees and commissions charged by payment agents

Market rates for fees by payment method

Also, please remember that payments to an agent are usually subject to consumption tax, as it falls under compensation for services.

Determining the best payment agent for you

This article briefly introduces the types and market rates of payment agent services.

In today’s world of rapid digitalisation, customers’ payment needs are becoming more complex and diverse. As such, it is important for businesses to offer a range of payment options to attract a wide audience.

Payment processing companies act on behalf of merchants and sign contracts with institutions to facilitate the introduction of multiple payment methods. They also provide services related to transactions and business operations. As a result, considering convenience and other factors for both the customers and merchants, a payment agent could provide a benefit to both parties.

Agent fees vary from company to company and depend on the scope of their services. Therefore, if you are considering using one, it is key to make a comprehensive decision based on an understanding of your business’s scale and your customer base, rather than deciding solely on price.

Please refer to our article on important points to consider when choosing a payment agent for more information.

At Stripe, we offer a variety of payment methods, including convenience store payments, bank transfers, and various credit card options. We also provide a range of transaction-related functions and services, from accepting purchases to information processing and revenue management. For example, by introducing Stripe Payments, you can create an environment that meets all your needs on a single platform, allowing you to smoothly and easily accept payments from your customers.