The Parts of a Payment Fee
A payment fee usually combines a variable percentage with a fixed transaction charge. The percentage scales with the order value: 2% on a $100 order is $2, while the fixed charge stays the same whether the customer spends $30 or $150. This makes the fixed component more significant on smaller meal-kit baskets. Check whether the provider applies both charges to each successful transaction or uses a different schedule for payment methods.
Gateway or platform costs are separate charges for processing, routing, or using the commerce platform. They may be charged per transaction, as a recurring subscription, or as a combination, so allocate recurring costs across the transactions they support before comparing order economics. Currency-related charges can include a conversion margin or cross-currency processing fee when the customer, payment account, and settlement currency do not match. Record each component separately rather than treating the total as one percentage; that shows which fee changes when order value, payment method, or currency mix changes.
| Component | How it behaves | Use it to assess |
|---|---|---|
| Percentage charge | Rises with transaction value | The cost of larger baskets |
| Fixed transaction fee | Stays broadly constant per transaction | The pressure on low-value orders |
| Gateway or platform cost | Per-transaction, recurring, or both | The full cost of keeping payments available |
| Currency-related charge | Triggered by currency mismatch or conversion | The effect of international payment flows |
Why Low-Value Orders Suffer Most
A fixed transaction charge takes a larger bite from a low-value meal kit order because it does not shrink with the basket. The following is an illustration using a 2% variable fee plus A$0.30 per transaction, not a quote for any provider. On a A$20 order, the fixed charge is A$0.30 ÷ A$20 = 1.5% of revenue before the percentage fee is added. On a A$120 order, it is A$0.30 ÷ A$120 = 0.25%.
This matters when customers choose smaller boxes, add fewer extras or use a discount. A A$20 order generates A$0.40 + A$0.30 = A$0.70 in payment fees under this example, leaving 96.5% before other costs. A A$120 order generates 2% × A$120 + A$0.30 = A$2.70, so the fee rate falls to A$2.70 ÷ A$120 = 2.25%. Compare effective fee rate when setting a minimum basket or assessing promotions; compare the fixed component when deciding whether a low-value order is worth acquiring.
| Order value | Variable fee (2%) | Fixed charge | Total fee | Effective fee rate |
|---|---|---|---|---|
| A$20 | A$0.40 | A$0.30 | A$0.70 | 3.50% |
| A$40 | A$0.80 | A$0.30 | A$1.10 | 2.75% |
| A$80 | A$1.60 | A$0.30 | A$1.90 | 2.38% |
| A$120 | A$2.40 | A$0.30 | A$2.70 | 2.25% |
Worked example with sample numbers
This example is illustrative. It uses sample numbers for a meal kits store selling in Australia. They are made up to show the method, they are not a benchmark, and your own figures will differ.
Formula: Payment fee = order value x percentage + fixed amount.
| Order value | Fee | Fee as share of order |
|---|---|---|
| A$20.50 | A$1.11 | 5.4% |
| A$40.99 | A$1.76 | 4.3% |
| A$81.99 | A$3.07 | 3.7% |
| A$245.97 | A$8.32 | 3.4% |
Run the same sum with your own numbers in the free calculator, or browse guides for sellers in Australia and more meal kits guides.
General information only: tax, duty and import rules change and depend on your situation, so check with an accountant or the official source before acting.
Eligible Shopify stores can see these numbers for their own store through the Founding 10,000 offer.
Refunds, Chargebacks and Currency Conversion
Refunds may leave percentage or fixed fees unrecovered; partial refunds may leave some or all fees. Record refunded value separately from retained fees to show the contribution-margin impact. Record chargebacks separately: they may reverse payment and add dispute fees. If successfully challenged, record the fee reversal too. Treat them as payment or dispute expense; divide total chargeback cost by delivered-order revenue, while chargeback count flags operational or fraud issues. For foreign-currency payments, compare charged and settled amounts, including conversion, cross-border and exchange-rate costs. ORVX keeps each merchant’s trading currency and reports refund value against revenue and realized revenue from delivered orders only.
How to Read the Worked Example
Read the worked example from left to right, keeping each line as a separate step. Start with the order value: this is the revenue base on which the variable fee is calculated. Then identify the percentage component and fixed component shown in the example. Add those components to arrive at the total payment cost for that order. Do not compare the percentage alone with margin; the fixed amount must remain in the calculation.
Next, follow the example’s bridge from order value to contribution margin. Begin with the revenue basis it specifies, subtract payment cost, then subtract the other contribution costs included there, such as product cost or advertising. The remaining amount is contribution in currency. Divide that amount by the same revenue basis to read contribution margin as a percentage.
Check that every line uses the same GST treatment and order status. A GST-inclusive selling price should not be combined with GST-exclusive costs without adjustment. For a second scenario, change only the input being tested, such as basket value or payment method, so the difference isolates payment cost. You can verify the arithmetic with ORVX’s profit margin calculator.
How to Compare Providers Fairly
Use one sheet with the same Australian order values from your data and payment mix customers use: cards, digital wallets and instalments. Record whether fees are in AUD, involve conversion, and are GST-inclusive or GST-exclusive. Calculate fee per order and expected monthly total, then compare headline rates only when assumptions match.
- Apply identical full and partial refund cases, including retained fees, to every provider.
- Include subscriptions, minimums, tiers, payout charges and contract terms; use monthly totals where fixed charges matter.
- Compare AUD fees on AUD orders and keep foreign-currency transactions separate.
- Record each term’s source and date; mark unspecified refund, billing or conversion treatment unknown.
| Field | Use the same basis for every provider | What it tells you |
|---|---|---|
| Order value | $60, $100 and your actual average order value | Sensitivity to basket size |
| Payment mix | The same share of cards, wallets and instalments | Blended fee per order |
| Refunds | The same full and partial refund cases | Retained cost on returned revenue |
| Currency | AUD order and settlement scenario | Comparable cash cost |
| Billing | One month, including fixed charges and tiers | Total payment cost at volume |
Turn Fee Differences Into Margin Decisions
Use payment cost per order for dollar impact and payment cost as a percentage of sales to compare basket sizes. Review both when comparing providers or methods. Test a fixed minimum-order policy against payment cost per order, average order value and the share of orders below the proposed threshold, not payment percentage alone.
For pricing, assess contribution per order after product cost, payment cost and advertising, then check margin. A price absorbing a fee difference may still weaken profitability when product or acquisition cost is high. For payment methods, compare fee, adoption and refund or chargeback experience: the lowest nominal fee is not necessarily the lowest cost per completed order.
Compare providers’ effective cost across your actual order mix. Broader order profitability asks whether the order made money after major costs. Payment fees are one expense; gross profit, net profit and contribution after advertising show whether customer and order economics work. Use the profit margin calculator to test scenarios, then validate them against delivered-order results.
Payment fees should be assessed against the order mix they will actually process, not by headline pricing alone. Separating percentage charges, fixed costs, refunds, disputes and currency effects gives meal kit owners a clearer basis for comparing providers and protecting contribution margin.
Sources
- Register for goods and services tax (GST) (business.gov.au (Australian Government), checked 26 October 2026).
How this page was made: drafted with AI from a brief, then checked by automated rules for arithmetic, sources and duplication. The sample numbers were calculated, not reported.