Tap to Pay Fees Explained: What You'll Actually Pay

The three main fee types

When comparing Tap to Pay apps, you’ll encounter three core fee categories:

1. Transaction fees (per sale) — the biggest cost for most businesses
2. Monthly fees (subscription) — fixed monthly charge, or zero on free plans
3. Additional fees (optional or situational) — chargebacks, instant payouts, currency conversion, etc.

Let’s break down each one.

Transaction fees: the main cost

The transaction fee is a percentage of each sale, often plus a small fixed amount. For example:

• 2.6% + 15¢ means a $100 sale costs you $2.75 in fees ($2.60 + $0.15).
• 1.75% (flat) means a $100 sale costs you $1.75 in fees.

What affects your transaction rate?

• Provider — Square charges 2.6% + 15¢ in the US on its free plan; SumUp charges 1.69% in the UK; Flatpay uses a flat subscription model with rates as low as 1%.
• Plan — Paid plans often have lower rates (e.g., Square Plus is 2.5% + 15¢ vs. 2.6% + 15¢ on the free plan).
• Volume — High-volume merchants can negotiate custom rates with providers like Stripe or Adyen.
• Card type — Most apps charge a blended rate (same for Visa, Mastercard, Amex). Some use interchange-plus pricing, where Amex might cost more than Visa.
• Country — Rates vary significantly by market. EU rates are often lower than US rates due to interchange caps.

Comparing rates: watch the details

A lower percentage isn’t always cheaper. Compare these two examples:

• App A: 2.6% + 15¢
• App B: 1.9% + 30¢

Which is cheaper?

Sale amount	App A cost	App B cost	Winner
$10	$0.41	$0.49	App A
$50	$1.45	$1.25	App B
$100	$2.75	$2.20	App B

App B has a lower percentage but a higher fixed fee, so it’s better for larger transactions and worse for small ones. Know your average transaction size before comparing.

Monthly fees: free vs paid plans

Many Tap to Pay apps offer a free tier with no monthly charge. Others require a monthly subscription, often in exchange for lower transaction rates or premium features.

Free plans (no monthly fee)

Apps with no mandatory monthly fee:

• Square — free POS, 2.6% + 15¢ per transaction
• SumUp — no monthly fee, 1.69% in the UK
• Stripe — no monthly fee, 2.7% + 5¢ in the US
• PayPal — free tier available

See our full list of free apps.

Paid plans (monthly subscription)

Some providers charge a monthly fee in exchange for lower transaction rates or extra features:

• Square Plus — $29/month, 2.5% + 15¢ per transaction (vs. 2.6% + 15¢ free)
• Flatpay — €40–€129/month, rates as low as 1% (vs. typical 1.5–2.9% free plans)
• Shopify POS Pro — $89/month, unlocks advanced inventory and staff features

When does a paid plan make sense?

Calculate the breakeven point:

(Monthly fee) ÷ (Transaction rate difference) = Monthly volume where paid plan becomes cheaper

Example: Square’s free plan is 2.6% + 15¢, and Plus is 2.5% + 15¢ for $29/month. The rate difference is 0.1%.

• Breakeven: $29 ÷ 0.001 = $29,000/month in sales
• If you process more than $29,000/month, the paid plan saves money.
• If you process less than $29,000/month, stick with the free plan.

Additional fees to watch for

Beyond transaction and monthly fees, here are common extras:

1. Chargeback fees

When a customer disputes a payment, you’ll typically pay a chargeback fee (usually $15–$25) even if you win the dispute. The sale amount is also deducted during the investigation and only returned if you win.

How to avoid: Provide clear receipts, respond to customer complaints quickly, and keep proof of delivery for high-value sales.

2. Instant payout fees

Most apps settle funds to your bank in 1–2 business days for free. If you need money instantly, some providers (like Square) offer instant transfers for a fee (typically 1–1.5% of the transfer amount, often with a minimum fee like $0.50).

Neobank-linked apps like Revolut, Tide and Monzo often include same-day or instant payouts at no extra charge, since the money stays within their own banking system.

3. Currency conversion fees

If you accept international cards and the customer’s card is in a different currency, the provider may charge a currency conversion fee (typically 1–3% on top of the transaction fee).

Example: A UK merchant accepts a €100 payment from a European customer. The app converts €100 to GBP at the exchange rate, then adds a 2% conversion fee.

4. Refund fees

Some providers charge a fee to process refunds (or don’t return the original transaction fee when you refund a sale). Others refund the full transaction fee.

• Square — refunds the transaction fee when you issue a refund
• Stripe — does not refund the transaction fee (you lose the fee even if you refund the sale)

Check the refund policy if you expect to process refunds frequently.

5. Hardware and accessory fees

Tap to Pay apps don’t require extra hardware, but if you want accessories (receipt printer, barcode scanner, traditional card reader), you’ll pay for those separately.

• Square Stand — $149 for an iPad stand with built-in reader
• Receipt printers — $100–$300 depending on brand

These are optional — Tap to Pay works without any hardware.

6. Premium features

Some apps gate advanced features behind paid tiers:

• Advanced reporting — detailed analytics, custom date ranges, export to accounting software
• Team management — user permissions, role-based access
• Inventory tracking — stock alerts, purchase orders
• Customer loyalty programs — built-in rewards and repeat-customer tracking

Check whether the features you need are included in the free tier or require a paid plan.

Payout speed and how it affects cash flow

How fast you receive your money matters, especially for businesses with tight cash flow:

• 1–2 business days (standard) — most apps, free of charge
• Same-day — some neobank apps, free if you hold an account with them
• Instant (on-demand) — Square, Stripe and others, typically 1–1.5% fee

Example: You sell $1,000 on Monday.

• Standard payout: Receive $974 (after 2.6% fee) on Wednesday morning, free.
• Instant payout: Receive $964 (after 2.6% + 1% instant fee) on Monday afternoon, but you pay an extra $10 for speed.

Faster payouts cost more, so only use instant transfers when you truly need the cash immediately.

How to compare total cost

Here’s a step-by-step formula to calculate your real monthly cost:

1. Estimate monthly volume: How much you sell per month (e.g., $5,000).
2. Estimate transaction count: How many transactions (e.g., 100 sales).
3. Calculate average transaction: Volume ÷ count (e.g., $5,000 ÷ 100 = $50 per sale).
4. Apply the fee:
   • Percentage fee: $5,000 × 2.6% = $130
   • Fixed fee: 100 transactions × $0.15 = $15
   • Total transaction fees: $130 + $15 = $145
5. Add monthly fee: If the app charges $29/month, total cost = $145 + $29 = $174/month.

Now compare that total across different apps to find the cheapest option for your volume and transaction size.

Real-world examples

Example 1: Coffee shop (high volume, small transactions)

• Monthly volume: $10,000
• Transaction count: 400 (average $25 per sale)
• Comparing:
  • Square Free: 2.6% + 15¢ → ($10,000 × 0.026) + (400 × $0.15) = $260 + $60 = $320/month
  • SumUp (UK): 1.69% → $10,000 × 0.0169 = $169/month
  • Winner: SumUp (saves $151/month)

Example 2: Freelance photographer (low volume, large transactions)

• Monthly volume: $3,000
• Transaction count: 6 (average $500 per sale)
• Comparing:
  • Square Free: 2.6% + 15¢ → ($3,000 × 0.026) + (6 × $0.15) = $78 + $0.90 = $78.90/month
  • Stripe: 2.7% + 5¢ → ($3,000 × 0.027) + (6 × $0.05) = $81 + $0.30 = $81.30/month
  • Winner: Square (saves $2.40/month — marginal difference)

Example 3: Retail store (very high volume)

• Monthly volume: $50,000
• Transaction count: 1,000 (average $50 per sale)
• Comparing:
  • Square Free: 2.6% + 15¢ → ($50,000 × 0.026) + (1,000 × $0.15) = $1,300 + $150 = $1,450/month
  • Square Plus: $29/month, 2.5% + 15¢ → $29 + ($50,000 × 0.025) + (1,000 × $0.15) = $29 + $1,250 + $150 = $1,429/month
  • Winner: Square Plus (saves $21/month, but also unlocks more features)

Cheapest apps by use case

• High volume, small transactions (coffee, retail): SumUp (Europe), Flatpay (subscription model)
• Low volume, any transaction size: Free apps like Square or SumUp
• Need instant payouts: Neobank apps like Revolut, Tide, Monzo (free instant access if you hold an account)
• Developers/platforms: Stripe (negotiable rates at volume, strong API)

See our cheapest apps comparison for current rate rankings.

Bottom line: how to choose

1. Calculate your monthly volume and average transaction size.
2. Compare total cost (transaction fees + monthly fee) across 3–5 apps using the formula above.
3. Factor in payout speed — faster access to cash has value, especially for tight cash flow.
4. Check for hidden fees — chargebacks, refunds, currency conversion.
5. Verify features — if you need business reporting, invoicing, or integrations, make sure they’re included.

Start with our cheapest apps list, filter by free if you want zero monthly fees, or browse small business picks for the best overall value (features + price).