Make a profit from each transaction (most popular)
One of the most popular and straightforward ways to charge for payments is to mark up each transaction with a small fee. You’ve already negotiated payment fees with Adyen (your buy-rate), now it's up to you to decide how much you would like to charge on top of that buy-rate and what to charge your users (the sell-rate). What’s worthwhile to note is that Adyen’s pricing is always based on Interchange++ pricing (passthrough model). This means that your cost or buy rate will fluctuate depending on factors like the card type (business or consumers), and region.
Regardless of how much you plan to add, though, make sure to charge enough to make an impact on your bottom line while staying competitive. When determining your sell-rate, it's important to consider both the value you're providing to your customers, the size of the customer, and any additional costs you may incur. It might be helpful to research your competitors and analyze their pricing models and feature offerings as you make these decisions.
Most frequently, we see that SaaS platforms sell a blend price to their smaller users as it's the easiest way to communicate internally and externally. That blend rate (sometimes also called MDR or Merchant Discount Rate) varies per country, customer payment choices and per industry, so make sure to ask your account manager for insights and advice on average cost or have a look at our pricing research in our annex.
Example of blend price in Europe:
Example of blend price in the US:
We recommend playing around with your price points depending on your business needs. This could be either by creating different pricing tiers for different packages:
by differentiating between channels:
or by providing a more custom Interchange++ pricing for larger and enterprise customers or for industries like hospitality with a high share of corporate/virtual cards.
There are pros and cons of offering blend or Interchange++ pricing rates to your customers, but whatever sell-price you choose, remember to keep it simple and transparent.
Pros for platforms
Easier to explain
Future-proof and more scalable
Know what margin to expect
Cons for platforms
Varying cost basis per card type
Risk of not charging enough for certain card types (especially where Interchange and Scheme fees are not capped)
B2B platforms need to charge a higher blend price compared to B2C platforms to cover higher business card costs
Higher complexity when it comes to reporting
Pros for users
Easier to understand
Know what costs to expect
More straightforward reporting
Expected lower costs in markets where Interchange and Scheme fees are capped (e.g. Europe)
This will be the main advantage competing against existing payment contracts from banks and legacy payment providers, which typically advertise a very cheap transaction rate, but then make their margin via either monthly or hidden fees.
In some industries (for instance, food and beverage) and markets (like Germany), we see that splitting out debit and credit card rates is another way of providing a very competitive edge to competition. This makes sense if the market is highly competitive and if debit card usage is very high. We generally advise to sell payments on value and not on price. While this may be a strategy to win market share, it introduces complexity and may be not the best way to maintain a healthy margin for your payment proposition long term. For example:
Debit cards from 0.9% + 0.10€
Credit cards from 1.9% + 0.10€