Gateway Cost measures the total payment gateway processing fees charged by payment processors like Stripe, PayPal, or Shopify Payments.
Gateway Cost = SUM ( Payment Gateway Fees )
| Metric | Definition |
|---|
| Payment Gateway Fees | Flat fees + percentage-based fees charged per transaction by payment processors |
| Metadata | |
|---|
| Type | Currency |
| Data Source | Shopify |
| Aggregation | Sum |
Example
Your store processed $125,000 in revenue across 1,247 orders in January. With a 2.9% + $0.30 fee structure:
| Component | Calculation | Amount |
|---|
| Percentage fees | $125,000 × 2.9% | $3,625 |
| Flat fees | 1,247 × $0.30 | $374 |
| Total Gateway Cost | | $3,999 |
How It Works
Gateway Cost aggregates all payment processing fees from your payment processor. This includes both the percentage-based fee (typically 2.4-3.5% of transaction value) and any flat per-transaction fees ($0.30 is common). The metric pulls from Shopify’s transaction data.
When to Use
| Scenario | Action |
|---|
| Evaluating payment processors | Compare Gateway Cost across different processors to find the best rates |
| Calculating contribution margin | Deduct from revenue at CM2 level for accurate profitability |
| Benchmarking processing costs | Target 2-3% of revenue for typical e-commerce |
| Analyzing per-order economics | Combine with per-order metrics to understand unit costs |
| Metric | Relationship |
|---|
| Gateway Cost Per Order | Average gateway fee per order |
| Gateway Cost % | Gateway fees as percentage of net revenue |
| Total Transaction Cost | Gateway Cost + Other Transaction costs |
