2Checkout Fee Calculator

Behind the number

2Checkout, now part of Verifone, offers tiered plans that bundle payment processing with merchant-of-record services: tax handling, invoicing, subscription management and global payment methods.

Cost = amount × plan rate + fixed, where the rate is materially higher than a bare processor because it covers services a bare processor does not provide.

A real example

A $58 sale on a plan at 3.5% + $0.35: $2.38, an effective 4.10%. On the merchant-of-record plan at 6% + $0.60: $4.08, an effective 7.03%.

Against Stripe's $1.98, the merchant-of-record option costs $2.10 more per order.

What that buys is 2Checkout becoming the seller of record: taking on VAT and sales tax determination, collection and remittance across every market, plus the compliance obligations that go with them.

The usual mistakes

Comparing the rate against a payment processor is comparing different products. The right comparison is against the cost of handling multi-jurisdiction tax compliance yourself: registrations, filings, software and professional fees.

For a business selling digital goods internationally that cost is substantial and largely fixed, which means the merchant-of-record premium is cheap at low volume and expensive at high volume.

Using the result

Model the crossover explicitly: the merchant-of-record premium per order times annual orders, against the annual cost of doing compliance directly.

Then revisit it as volume grows. The arrangement that is obviously right at 500 orders a year is frequently obviously wrong at 50,000.

What merchant of record actually transfers

The provider becomes the legal seller. They appear on the customer's statement and invoice, they own the tax obligations, they handle chargebacks and refunds, and they carry the liability for getting any of it wrong.

For a digital goods business selling into dozens of countries, that removes an obligation that would otherwise mean registrations in each market with a digital services regime, a genuinely large administrative burden with no threshold protection for non-established sellers.

The trade is control and margin. You do not own the customer relationship in the same way, refund and dispute policy is partly theirs, and the premium is several points of revenue. That is a reasonable trade for a small international digital business and a poor one for an established company with a finance function, which is why so many businesses start on a merchant of record and migrate off it.

Moving off a merchant of record means taking on the tax registrations, the subscription billing relationships and the customer payment credentials all at once, and the third is the hardest.

Stored cards held by a merchant of record are held in their name and under their merchant agreement, which makes migrating them considerably more involved than moving between ordinary processors. In some arrangements they cannot be migrated at all, and every subscriber has to re-authorise.

For a subscription business that is a churn event rather than a technical task, and it is worth asking about at the point of signing up rather than at the point of leaving, the answer materially changes how reversible the decision is.