Fees as low as …% *

You’ve probably seen this before when evaluating processing costs – a low processing fee with phrasing such as “As low as…” or “starting at …”, ending with an asterisk.

Different transactions are charged different rates by the credit-card companies, depending on the type of card used and the potential risk of the transaction.

Payment gateways then roll those rates on to you with their own pricing scheme, often separating payments into classes of "qualified", "mid-qualified" and "non-qualified" payments. Qualified payments are charged the advertised “starting at…” rates, while non-qualified payments are charged increasingly higher rates depending on different factors (also known as three-tier pricing).

Recurring payments that are charged using a card on file automatically are charged the highest fees. For a membership based business, that means most of the transactions will be considered non-qualified and be subject to much higher fees.

Other charges can include setup fees, monthly fees, charge-back fees and more.

At Gymdesk we partnered with payment processor who offer simplified rates with that are optimized to online and recurring billing, and no monthly fees. Let's see how it compares to Mindbody's fees:

To show how this adds up, we'll calculate it using a monthly payment volume of $12,000 in 100 transactions. We’ll assume 90 of these transactions are active members on recurring billing (i.e, offline transactions which are non-qualified), and 10 are new members which are swiped in where possible and, to keep it simple, don’t use rewards cards or other non-qualified cards.

We’ll also include 1 chargeback per month, which we defend successfully (Stripe will refund the chargeback fee if you defend it successfully).

More than $100 monthly difference in cost due to higher rates on most payments and additional fees. This is one of the reasons we integrate with Stripe and Square, as they work well for online payments and membership based businesses, and provide a better experience overall.