Business models
The transaction fees business model
The transaction fees business model: you charge a small fee each time money moves through your product. You earn a percentage of each payment or trade, which grows along with your customers' sales.
How it makes money
You earn a percentage of each payment or trade, which grows along with your customers' sales. It needs high volumes and a lot of trust.
Real examples
- Stripe charges per card payment.
- PayPal charges a fee on payments.
- Shopify charges a fee in some plans if you use outside payment providers.
The numbers to watch
- Total value processed
- Your share of each transaction
- Fraud and refund rate
Who it fits
Products that sit where money already flows.
What goes wrong
Fraud and rules: moving money is regulated, so most start by building on an existing payment provider.
Try it this week
Look at where customers already pay each other. Could your product sit in the middle?
Then give it a time: one block of 90 minutes this week, in your calendar. Our playbooks have the next steps for finding your first customers.
Questions
What is an example of the transaction fees model?
Stripe charges per card payment.
What is the biggest risk with the transaction fees model?
Fraud and rules: moving money is regulated, so most start by building on an existing payment provider..
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