Why Are Payment Processing Fees So High? What It Really Costs to Move a Payment

by PayFi · 5 October 2026 · Notes from building

Most of what sellers pay to get paid is not the cost of moving money. It pays for everything built around the payment: many companies in the middle, disputes, money held for weeks, customer files and the risk that comes with them. Take those layers away, and the machine that moves a payment can be very small, and so can the fee.

"How can they afford one percent?"

Let's meet a seller we will call Dewi. She is not a real person, but her doubt is one many sellers have.

Dewi sells photo-editing presets: small files that give photos a certain look. Her buyers are all over the world. For years she has used a card payment service, and she has learned to live with the fees. On a 50 dollar sale to a buyer abroad, she keeps about 47 dollars.

Then she reads about a payment link that charges a flat 1 percent. On the same 50 dollar sale, she would keep 49.50.

Her first reaction is not excitement. It is suspicion. "If moving money really cost that little," she thinks, "why would everyone else charge three times as much? Either they are cheating me, or this new thing is cutting corners somewhere I cannot see."

It is a sensible question. A price that looks too good is often hiding something. This essay is about where the money in a payment fee actually goes, and why the answer is less mysterious than it seems.

What sellers pay today

Start with the size of the bill.

In the United States alone, merchants paid 172.05 billion dollars in card processing fees in 2023, according to the Nilson Report, a payments industry newsletter. That was 7.1 percent more than the year before. The cards generated 11.24 trillion dollars in purchases, so the fees came to roughly one and a half percent of everything bought with them (Nilson Report).

That is the average across all businesses, including giant retailers who negotiate low rates. Small online sellers usually pay more. Stripe, one of the most popular payment services for small businesses, publishes its standard US price: 2.9 percent plus 30 cents for each successful card payment. An international card adds 1.5 percent, and currency conversion adds another 1 percent (Stripe).

For Dewi's 50 dollar sale to a buyer abroad paying in another currency, that adds up: 2.9 plus 1.5 plus 1 percent is 5.4 percent, which is 2.70 dollars, plus the 30 cents. Three dollars in fees. And if a buyer disputes the payment, Stripe charges a further 15 dollars for each dispute received (Stripe).

Why small sales hurt the most

There is a detail in card pricing that matters most to sellers of cheap digital products: the fixed part of the fee.

The 30 cents in "2.9 percent plus 30 cents" is charged on every payment, however small. On a 100 dollar sale, it hardly matters. On a 5 dollar sale, it is painful: 2.9 percent of 5 dollars is about 15 cents, plus 30 cents, which comes to 45 cents, or about 9 percent of the price. Add an international card and currency conversion, and it climbs higher.

A flat percentage with no fixed part behaves differently. One percent of 10 dollars is 10 cents, whatever the size of the sale. For sellers of templates, presets, short guides and other low-priced files, that difference decides whether a cheap product is worth selling at all.

To be fair about it, PayFi has a limit of its own at the low end: the minimum price for a link is 9.9 USDT or USDC. Very tiny payments are not what it is built for.

Where the money goes

Those fees are not pure profit for anyone. They are shared among several companies, and they pay for real work. It helps to see what that work is.

Many hands. A card payment passes through a chain: the checkout service, a processor, the card network, the bank that issued the buyer's card and the bank that receives the money for the seller. Each one is a company with its own systems, staff and costs, and each takes part of the fee.

Risk and disputes. A card payment can be reversed months later. Someone has to investigate disputes, collect evidence, and sometimes pay out of their own pocket when a seller disappears. That risk is priced into every payment, including the honest ones.

Fraud. Stolen card numbers are a constant problem, so card systems run fraud checks on every transaction, and the cost of the fraud that gets through is spread over everyone.

Holding money. Card payment services collect payments into a balance and pay sellers out on a schedule. Holding other people's money brings legal duties, accounting work and risk.

Knowing customers. Services that hold money must check who their customers are. Financial institutions worldwide spend enormous sums on this. LexisNexis Risk Solutions estimated the global cost of financial crime compliance at 206.1 billion dollars a year (LexisNexis Risk Solutions).

Keeping personal data safe. Names, addresses, card numbers, identity documents: all of it has to be stored and protected. When protection fails, it is expensive. IBM's 2025 Cost of a Data Breach report put the global average cost of a breach at 4.44 million dollars, and the US average at 10.22 million (CyberScoop).

Support. When so much can go wrong, people need someone to talk to. Support teams cost money.

None of this is a scam. It is the honest cost of a system that holds money, allows reversals, stores personal data and connects thousands of banks. Dewi's three dollars are paying for all of it.

What does moving the money itself cost?

Now ask a narrower question. If you strip away everything above, what does it cost simply to move 50 digital dollars from a buyer to a seller?

On the Solana network, a transaction pays a base fee of 5,000 lamports for each signature, according to Solana's own documentation. A lamport is a tiny fraction of SOL, Solana's own coin; 5,000 lamports is 0.000005 SOL (Solana). A transaction can also add an optional priority fee to be processed faster. Even with that, the cost of moving the money is a small fraction of a cent.

That is the gap Dewi was suspicious about. The cost of moving the money is almost nothing. The cost of everything around the money is most of the fee.

Put the two numbers side by side. Dewi's card sale cost 3 dollars in fees. Moving 50 digital dollars on Solana costs less than a single cent, even after adding a small priority fee. The difference between those two numbers is not the price of moving money. It is the price of everything a card system wraps around the money, whether a particular seller needs it or not.

So the real question is not "how can a 1 percent service afford to move money?" It is "which of those layers does it actually need?"

One small machine

PayFi runs on a single rented server with 1.5 GB of memory.

On that one machine runs everything PayFi does: the pages where sellers create links and buyers check out, a watcher that notices when payments arrive at order addresses, the part that splits each payment between the seller and PayFi, the part that sends refunds, the public ledger and a few health checks. The data lives in one database file, with an encrypted backup made every hour.

That is the whole operation. There is no data centre, no office, no fleet of servers. And it is enough, because of how much of the usual work simply does not exist.

Following one payment through the machine

It helps to follow a single real payment through this small setup, step by step.

On October 3, 2026, a buyer paid 10 USDT for a product called Basics of Statistics. Before that, the seller had created the link by entering a wallet address, a product name, a price and the product's delivery link. Nothing else: no account, no email.

When the buyer opened the link and pressed the button to pay, the server created a payment address for that order alone and showed it on the page, together with a private order link for the buyer to keep.

The buyer sent 10 USDT. It landed at the order's address at 07:35:30 UTC (Solscan). The watcher noticed it, checked that the full price had arrived and unlocked the product on the buyer's page.

Then the splitter built one transaction: 9.9 USDT to the seller's wallet, 0.1 USDT to PayFi, and the order's account closed so its deposit came back. It was confirmed at 07:35:35 UTC, five seconds after the payment landed (Solscan). Finally, the payment was written into the public ledger.

That is the entire job. Every step is small. None of them needs a large machine, because none of them involves holding, reviewing or reversing anything.

Why it can be so small

The server is small because the list of things it does not do is long.

It does not keep accounts. There are no usernames, passwords or profiles. Sellers sign in to their dashboard by signing a message with their own wallet.

It does not hold balances. Each payment is split within about 20 seconds: 99 percent to the seller's wallet, 1 percent to PayFi. There is no balance to track, reconcile or pay out later.

It does not handle card data. No card numbers ever touch it, so none of the heavy security rules for storing them apply.

It does not process disputes. Blockchain payments are final once complete. There are no chargebacks to investigate and no evidence files to collect.

It does not collect identity documents. No passports, no selfies, no proof of address. Nothing to verify, store or protect.

It keeps very little about people, and not for long. According to its checkout page, PayFi keeps only a scrambled form of the buyer's IP address and the encrypted product link for each order, and deletes them automatically after 90 days.

Each of these "does not" removes a whole department from a normal payment company: account support, payout operations, card security, dispute handling, identity verification, data protection. What is left is small enough to fit on one modest machine.

Living within 1.5 GB

A small machine also shapes how the software is written. It cannot be careless with memory.

For example, the public ledger can be downloaded as one file. The code that writes that file has a built-in limit of 30,000 lines, with a comment explaining that it is a safety margin for a server with 1.5 GB of memory; above that, the export would need to be done in parts. Limits like this are written down where anyone reading the code can see them, rather than discovered when the server runs out of room.

Other parts work at a steady, modest pace. The refund sender checks its queue every 15 seconds. The ledger is sealed into Bitcoin at most once an hour when there are new lines, and at least once a day. None of these needs a large machine, because none of them tries to do everything at once.

Working within limits is not only about cost. It also keeps the system understandable. A small team can know what every part does, which matters when something needs fixing.

Small is also safer

There is a security side to keeping things small, and it matters to sellers and buyers more than the size of the server.

Every piece of data a company keeps is something that can leak. Every system it runs is something that can be broken into. The large costs in IBM's breach report come from exactly this: stolen personal records, investigations, notifications, lost customers. A system that holds millions of names, card numbers and identity documents is a valuable target, so it must spend heavily to defend itself.

A system that holds no card numbers, no identity documents, no names and no emails is a much less interesting target. If its database were copied, the thief would find order references, amounts and public wallet addresses that are already visible on the blockchain, plus scrambled IP addresses and encrypted product links that are deleted after 90 days.

Small also means fewer moving parts. A single server running a handful of clear tasks has fewer places for mistakes to hide than a sprawling platform. That does not make it immune to problems. It makes problems easier to find.

Why big payment companies do not simply do this

If the machine can be so small, why do large payment companies not cut their fees the same way?

Because they are built for a different job, and that job is genuinely expensive. Card payments must work with thousands of banks. They must allow buyers to dispute charges, which is a real protection that many buyers value. The companies hold money and must follow the rules that come with that. Their customers expect phone support, refunds on request and decades of reliability.

None of that can be removed from a card payment without changing what a card payment is. A small stablecoin payment link is not a cheaper version of the same thing. It is a different thing, with different promises: no reversals, no balances, no accounts, and the ability to check every payment yourself.

For some sellers and buyers, the card system's protections are worth what they cost. For others, especially sellers of digital products to buyers around the world, they are paying for layers they do not need. The point is to know which you are paying for.

Where the one percent goes

It is fair to ask what a 1 percent fee pays for in a setup like this.

Network fees. The fee for the Solana transaction that splits each payment is paid by PayFi, not taken from the seller's 99 percent.

Order accounts. Each order's payment address needs a small token account on Solana, which requires a deposit in SOL. PayFi puts up that deposit, and gets it back when the order's account is closed after the split.

A reliable connection to Solana. Watching for payments needs a paid connection to the network; free public connections are too limited for real use.

The server, backups and the rest. Rent for the machine, storage for backups and the small tools that keep it all running.

This essay does not publish PayFi's profit margin, and you should be wary of any article that claims to know a company's margins without showing them. But you can see the shape of it: most of the costs that make card fees high are simply not there.

There is one more place to look. If PayFi ever changes its fee or other money rules, the change is written into its public ledger as a new line, with its date. A seller can always check what the rules were when each sale happened.

Checking the small machine's work

A small operation that asks for a low fee and no account should not ask for blind trust either. Its work can be checked.

Every payment the server splits is a Solana transaction that anyone can open on a public explorer. Every payment is also written into the public ledger at payfi.cx/ledger, with a summary at the top: how much came in, how much went to sellers, how much was kept as fees, how much was refunded, how much is waiting for its owners, and a line for anything unaccounted for, which should be zero.

The ledger is sealed into Bitcoin regularly, so its past lines cannot be changed without anyone noticing. And the ledger page offers a small checking program that anyone can run on their own computer. It talks to Solana and Bitcoin directly, not to PayFi.

So a seller like Dewi does not have to wonder whether the small machine is quietly taking more than 1 percent. She can count.

The honest limits of a small machine

Small is a choice, and it comes with trade-offs. A seller deciding whether to rely on it should know them.

One machine is one point of failure. If the server goes down, the checkout pages stop and new payments are not split until it comes back. Money already sent to an order's address waits there; it does not go anywhere else, but the seller is not paid until the service is running again.

There is no large support team. The design tries to remove the reasons people need support: refunds are automatic, payments can be checked on public records. But if you want to talk to a person every time something seems odd, a small operator is not the right fit.

It can only grow so far without changing. A single small server has limits on how many payments it can handle at once. Growth would eventually mean a bigger machine or more of them. That is a normal engineering problem, but it is real.

Things outside its control remain. The companies behind USDT and USDC can freeze addresses. Solana itself can have busy or slow periods. Exchanges set their own withdrawal fees and speeds for buyers who pay from them.

None of these limits is hidden. They are the price of a fee that stays at 1 percent.

What this means for sellers

For Dewi, the comparison becomes concrete. On her 50 dollar sale to a buyer abroad:

• With the card service, she pays 3.00 dollars and waits for a payout. If the buyer disputes the payment, the 15 dollar dispute fee comes on top.
• With the payment link, she pays 0.50 dollars, and her 49.50 arrives in her wallet usually within about 20 seconds of the payment landing.

Over a year, the difference is not small. A seller making 100 such sales a month would pay about 300 dollars a month in card fees, or about 50 with a 1 percent fee. Across a year, that is roughly 3,600 dollars against 600, before counting a single dispute fee. For a small seller, the difference can be a new laptop, a course, or simply a better month.

There are trade-offs for her, too. Her buyers need USDT or USDC, and buying them the first time can cost them a card fee at an exchange. She gives up the comfort of a large company with a phone number. And she gains a few things money cannot buy: no dispute fees, no frozen balance, and a payment she can check herself.

What the small machine asks of you

A lighter system shifts some responsibility back to the seller, and it is better to say so plainly.

Because PayFi sends money straight to your wallet, you are the one who keeps it safe. That means a wallet you control and a recovery phrase written down somewhere secure. If you lose access to your wallet, there is no company that can reset it for you. PayFi never holds your money, so it cannot give it back to you either.

It also means paying attention to where you take your money afterwards. If you change digital dollars into local currency, you do that through an exchange you choose, under its rules and fees.

And you will not need much else. You do not need a website, an online store or a server of your own. A link in your bio, in a chat or on an invoice is enough. The machinery that a card-based online shop requires, from hosting to plugins to monthly subscriptions, is not part of the picture.

What this means for buyers

Buyers pay part of every card fee too, even when they never see it. Sellers build their payment costs into their prices.

With a flat 1 percent taken from the seller's side, the buyer pays exactly the listed price. There is no checkout surcharge from the payment link. The buyer's own costs are the ones they choose: their exchange's withdrawal fee if they pay from an exchange, or a tiny amount of SOL for the network fee if they pay from their own wallet.

The one real cost for new buyers comes earlier: getting digital dollars in the first place. Buying them with a card through a service like MoonPay costs up to 4.5 percent, with a minimum fee of up to 3.99 dollars, according to its pricing page (MoonPay). Exchanges funded by bank transfer are often cheaper. It is a cost paid once to get started, not on every purchase, but it is worth knowing before the first payment.

Buyers also benefit from what the small machine does not keep. With no account, no name, no email and no card number collected, there is nothing about them in a database to be leaked.

Questions to ask about any payment fee

Whether you choose PayFi or something else, a few questions reveal what a fee is really paying for.

What is the full price for my typical sale? Include extras for international cards, currency conversion and payouts, not just the headline rate.

What happens when a buyer disputes a payment? Is there a fee, and who decides?

How long is my money held before I get it? Money held is money at risk, and someone is paying to manage it.

What do they collect about me and my buyers? Every piece of data stored has to be protected, and the cost of protecting it is built into the price.

Can I check where each payment went? If not, part of what you pay for is trust.

How will I know if the fee changes? Look for a published record, not just an email you might miss.

Questions people ask

Is 1 percent too good to be true? It would be, for a service that held balances, handled disputes, checked identities and stored card data. It is less surprising for one that does none of those things and runs on a small machine.

Why does a card payment cost so much more? Mostly because of everything around the payment: several companies in the chain, disputes and fraud, holding money, checking identities and protecting personal data.

What if PayFi's server fails? New payments wait at their order addresses until it is back, then they are split as usual. Past payments are already in sellers' wallets.

Will the fee go up? Any change to the fee would be written into the public ledger as a new line, with its date. It could not change what was charged on past sales.

Who pays the Solana network fee? For the split that pays the seller, PayFi does. A buyer paying from their own wallet pays the small network fee for their own payment; a buyer paying from an exchange pays whatever the exchange charges for withdrawals.

Does a small server make payments slower? Not in a way buyers usually notice. The slow part of most stablecoin payments is the buyer's exchange, which can take minutes to send a withdrawal. Once the money lands at the order's address, the split usually happens within about 20 seconds; in the real October 3 payment above, it took five.

Why not use a bigger server, just to be safe? A bigger machine costs more every month, and that cost has to come from somewhere, usually the fee. The current machine is sized for the work it does today. If the work grows, the machine can grow with it. Paying for capacity nobody uses would only make the fee harder to keep low.

Where is my money while the payment is being split? At the address made for your order, for the seconds between the payment landing and the split. It is never mixed with other orders' money, and it never sits in a balance.

Back to Dewi

Dewi does what a careful seller should. She creates one payment link for a cheap preset pack and buys it herself, using USDC from an exchange. The money lands at the order's address, and seconds later 99 percent of it is in her wallet. On Solscan, she sees the split: her share, the 1 percent fee, and nothing anywhere else. The network fee for that transaction is a fraction of a cent.

Her suspicion was reasonable. A low price can hide a trick. But in this case, there was no trick to find. The fee is low because the machine is small, and the machine is small because most of what makes payments expensive has been left out on purpose.

The old belief says that payment fees reflect what it costs to move money. The more accurate belief is that they mostly reflect what it costs to hold money, reverse it, police it and store everything about the people who send it. Move the money directly, keep almost nothing, and the cost of getting paid can be very small. Small enough, in this case, to fit in 1.5 GB.

Sources

• Nilson Report, "Merchant Processing Fees in the United States—2023": nilsonreport.com
• Stripe, "Pricing": stripe.com/pricing
• LexisNexis Risk Solutions, "True Cost of Financial Crime Compliance" (2023): risk.lexisnexis.com
• CyberScoop, on IBM's Cost of a Data Breach Report 2025: cyberscoop.com
• MoonPay, "Pricing disclosure": moonpay.com
• Solscan, October 3, 2026 payment: buyer's payment, seller's payout
• Solana Docs, "Fee Structure": solana.com
• PayFi checkout page and public ledger: payfi.cx, payfi.cx/ledger