Payment Processor Fees

Whenever we process a payment from one of your backers, depending on their country and your project's currency, they can choose from a variety of payment options.

Some of them are:

• Pay with their Credit Card. This method supports all major Credit Cards in most countries.
• Pay using their Paypal Account.
• Pay using Venmo, Google Play, Apple Pay. These are available only to US backers.
• Pay using Stripe. This method is available only if your project is in USD.
• Pay in installments using Paypal. This is available only to US backers.

Each of the above payment methods comes with a different type of fee that is usually a percentage on the total amount of the transaction plus a flat rate fee.

This amount is deducted directly from the payment processor (e.g. Paypal, Stripe, etc), and our platform receives only the rest of the amount. For example if a backer paid $100, and the processing fee was $4, then we receive on your behalf $96.

The most common question we get is:

"We have been using Paypal and Stripe, and their fees are 2.9%, why is it around 5% in Hive???"

And to answer that, and clarify what actually happens with those fees, we need to take a deep dive into the details!

Unfortunately most people expect the payment fee to match the commonly advertised fee from each processor. For example, if you go to Stripe's fee page (https://stripe.com/pricing) you will see that the charge in the US is "2.9% + $0.30".

Here is where it get's tricky, and where most people make assumptions and miss-calculations. This also applies to business owners that may have been using those processors for years on their online Webshop!

Mistake Number 1: Dismiss the 30¢ per transaction fee!

This is the first, extremely smart, advertising trick. Most people will be very quick to dismiss that "30¢" fee, because in their mind is a very small amount! They tend to focus only to the percentage, and completely dismiss/forget that "30¢".

But, let's do some exercises and see how this "very small" flat fee can end up having a huge impact to your total payment fee.

Example: If a backer pays $20 for shipping, then the Stripe fee will be: 0.029 * 20 + 0.3 = $0.88 which is actually the 4.4% of the total amount!

The smallest your average amount paid in the pledge manager is, the highest your total percentage fee will end up being. For a $20 amount that 30¢ flat fee ends up being an extra 1.9%!

Do you see how they get you? And that's just the beginning. Let's go to the next common mistake.

Mistake Number 2: Dismissing the details!

If you read only the top of the pricing page, you only see that "2.9% + 30¢". BUT, if you scroll down and start reading the FULL analysis, you will see more fees appearing...

Please notice that "+1.5% for international cards". This means that ALL backers OUTSIDE the US, have a fee of "2.9% + 1.5% + 30¢". Which if we apply to our $20 example from above, we get:

$20 * 0.044 + $0.30 = $1.18, which is actually 5.9% of the total amount. And this will apply to about 40%-50% of your backers, as usually in KS you have about 50% to 60% backers from the US, and the rest are international.

As you can see, it is very easy to go from an advertised 2.9% to an actual 5.9%!

In addition to the above, every time you issue a "Refund", please note that neither Stripe nor Paypal refund their fees! This means that the backer will get the full refund amount, but the Paypal fees will NOT be returned. This we explain in the "Best Practices" of our Refund section in our Wiki and that's why we urge you to not give refunds of more than 85% of the total amount.