AppScenic Ecommerce Blog

Transaction fee – what is it and why it’s needed?

Transaction fee – what is it -  

As we got many questions about the transaction fees (mostly from dropshipping beginners) and why we have them, we decided to write a short article where we explain how this transaction fee come to be and why we need to have it. 

So, if you want to know more about why you need to pay transaction fees for third-party gateways, read on. 

What is a transaction fee?

A transaction fee is an amount a retailer has to pay every time a customer’s payment happens. Of course, the cost of this transaction fee will vary depending on the service used, and, most of the time, a transaction fee can be charged as a percentage of the transfer amount or with an additional fixed amount. 

As we want to give you multiple payment options, we have Bank transfers (USD, EUR, GBP), credit card, PayPal, Stripe transfers, and Wise available. Now, all these payment platforms charge a fee (for buyer protection, among others), which in turn is added to all your successful orders. 

So, in our case, the transaction fee covers all the costs like currency fluctuation and payment gateway fees. Also, we collect this transaction fee as we escrow order payments between you and suppliers which ensures a smooth return and refund process.

All of these mean that you will never have to experience any hidden fees or other such surprises.

Why does AppScenic charge a transaction fee?

There are many dropshippers, mostly beginners, who tell us that they don’t understand why AppScenic or other dropshipping and ecommerce platforms charge this type of fee. 

Now, we understand that this can mean a lower profit for some of you, and in some cases (if you start with a tight budget), all fees matter. And so you want to only pay the fees that are absolutely necessary. But actually, all ecommerce platforms charge transaction fees, one way or another, you can’t avoid them. 

How does it work in our case? Well, AppScenic charges a transaction fee for every order in your store based on your subscription plan. It can go up to 3% if you go for the Standard plan and get as low as 1% for our Elite plan when choosing a monthly subscription. But if you go for a yearly plan, then the transaction fee is 0% for the Elite plan, for example. 

Now, AppScenic has to guarantee that all its awesome features, including all payment gateways, are functioning properly 24h. Well, all these take lots of resources that we need in order to maintain these transactions at optimal levels regardless of the number of orders you’ll have at any given time. So, to put it simply, these transaction fees help us with the costs that come for us to do all this. More than that, transaction fees are in place to ensure full retailer protection.

What about the monthly cost of your subscription plan? Well, that is for accessing the platform and giving you access to all the tools you need to sell our products on your online store, like all the automation features that help your products stay synced 24/7 with our suppliers. 

On the other hand, AppScenic transaction fees will only be applied every time a customer makes an order. 

Do all the other ecommerce or dropshipping platforms have transaction fees?

Yes, absolutely. Some platforms may not make this transaction fee so transparent, but it is there in some form. At AppScenic, we choose to always be transparent with our customers, and that means we will always be open about our prices and fees. 

In conclusion

We charge transaction fees for third-party gateways in order to keep your store running smoothly 24/7, no matter how many orders you have at the same time. 

To sum up, all of this is meant to help you focus on getting more customers to your online store and not worry about orders and payment gateways.

News & facts:
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