Monthly subscription vs per-transaction fee: which processor is cheaper at your volume

When you accept card payments, you pay your processor in one of two ways: either a commission on every transaction with no fixed cost, or a monthly subscription plus a lower per-transaction fee. The question isn't "which is cheaper in general," because the answer depends entirely on how much you sell.

The good news: this isn't a matter of gut feeling. There's a clear mathematical break-even point, and once you know how to calculate it, you can compare any two offers in five minutes. In this article I'll show you the formula, a concrete step-by-step example, the hidden costs that can flip the result, and how to choose based on your real volume — not the number in the brochure.

The two models, in short

Pure commission (no subscription): you pay a percentage of each transaction, sometimes plus a small fixed fee per operation. You have no monthly cost. If you sell nothing in a given month, you pay zero. This is the typical model of plug-and-play solutions (Stripe, PayPal, most online gateways).

Monthly subscription + reduced commission: you pay a fixed sum every month regardless of sales, but the per-transaction fee is lower. This is the model of many bank POS terminals and "business" packages.

The logic is simple: the subscription is a fixed cost you only recover if you sell enough. Pure commission has no fixed cost, but taxes you harder on every euro you collect. Where do the two lines cross? That intersection is exactly where your decision lives.

The break-even formula

You need three numbers: the commission of the "cheap at high volume" processor (the one with the subscription), the commission of the "no fixed cost" processor, and the monthly subscription fee.

Break-even (in monthly turnover) = subscription ÷ (high_commission − low_commission)

An example, to make it clear. Suppose:

• Processor A: 2% per transaction, no subscription
• Processor B: 1% per transaction + a €10 monthly fee

The commission difference is 1% (i.e. 0.01). Divide the subscription by the difference: 10 ÷ 0.01 = €1,000.

That means: below €1,000 in monthly card revenue, A (pure commission) is cheaper. Above €1,000, B (subscription) starts to win, and the gap grows the more you sell. Swap in your real offers and you have your answer.

The hidden costs that flip the math

The headline percentage is rarely all you pay. Check every line before you decide:

• Fixed fee per transaction (a few cents per operation) — this kills profitability if you have many small baskets.
• Monthly minimum commission — some "cheap" subscriptions have a floor you pay even if you don't reach it.
• Chargeback / disputes — a fixed fee per dispute, sometimes painful.
• Currency conversion — if you collect in another currency, the exchange margin is an invisible cost.
• Payout timing — money frozen for several days has a real cash-flow cost.
• Setup fee, physical terminal rental, withdrawal fee.

The rule: add up all these lines over a typical month, not just the main percentage. Very often the processor with the "low" percentage ends up more expensive once you count the rest.

Online vs physical POS — not the same calculation

Many comparisons mix two different things. An online gateway (for payments on your site) and a physical POS terminal (for payments at the counter) have separate cost structures, even with the same provider.

Online, the percentage fee, the site integration and the security (3D Secure, anti-fraud protection) matter more. Physical POS adds extra costs: renting or buying the terminal, sometimes a maintenance subscription, occasionally a different fee for foreign-bank cards.

If you sell both in-store and online, calculate the break-even separately for each channel. A subscription may make sense for the POS in the shop, where you have steady volume, but not for the site that just launched. You're not obliged to use the same provider for both.

How to choose based on YOUR volume

Step by step:

1. Estimate a realistic monthly card turnover (not the dream number — the one from your last few months).

2. Request full offers from two or three processors, with every cost line.

3. Calculate the break-even with the formula above.

4. If you're below break-even and just starting, pick pure commission — flexible, no commitment, you pay only what you sell.

5. If you're consistently above break-even, switch to a subscription — you'll save month after month.

Re-check every few months: as you grow, the decision can change.

At MPO Web Studio we integrate the payment processor directly into the site we build for you, and we run this calculation on your own numbers, transparently, before you choose. We show you a working demo first, for free, then we work remotely — wherever you are. If you'd like a hand with the comparison, message us on WhatsApp and we'll do it together.