2.9% + $0.30 sounds reasonable, right? But your actual number all-in: 7%.
7% seems to be the going-rate for allowing startups to operate. It’s the rate to get access to investors via an accelerator. It’s also become the rate to simply transact.
Here’s the math taken from a real-world example:
Real company example doing $250,000 / month with $25 average ticket size.
Card processing fees
- 2.9% = $7,250
- 30¢ × 10K charges = $3,000
- Intl/FX surcharges = $1,500
$11,750 all-in, 4.7% effective rate
Disputes: $3,000
200 a month (2% dispute rate) at $15
14% win rate so $4,300 more in revenue claws back
Billing/Subscriptions Platform Fee:
$1,750 (0.7% of every recurring charge)
Other:
$250
Total: $16,750/month.
That’s OVER $200,000 PER YEAR IN FEES.
Interchange is what every processor needs to pay their underlying bank and card networks. This is typically 2%.
So… the processor's profit margin: 71% (or 5% on an absolute basis)
Bolt's profit margin is only about 1% on an absolute basis. That’s an 80% reduction.
100% off of billing fees (it’s free)
100% of fees returned on refunds
66.6% off of chargeback fees
~60% off of the payment margin.
Ready to switch? Message me now: ryan@boltapp(dot)com