Effective rate
The effective rate is your blended payment cost — the total you spend on transaction fees, payment processing fees, and platform fees, divided by your total GMV — expressed as a percentage. It’s the only metric that tells you what you’re actually paying to accept money.
Published rates (Stripe at 2.9%+30¢, Shopify Basic at $39/mo) are inputs. Effective rate is the output. Two merchants using the same platform can have very different effective rates depending on their average order value, their payment mix (cards vs PayPal vs Apple Pay vs BNPL), and their card type mix (consumer vs corporate, domestic vs international).
How to calculate your effective rate
Total fees paid (processing + platform transaction fee) ÷ Total GMV = Effective rate
Example: $100K GMV, Shopify Basic + Shopify Payments, $60 average order value
- Shopify Payments fee (2.9%+30¢ per transaction): $2,900 + (1,667 transactions Ã- $0.30) = $2,900 + $500 = $3,400
- Platform transaction fee: $0 (using Shopify Payments)
- Plan fee: $468/yr (not included in effective rate — fixed cost)
- Effective payment rate: 3.4%
Same merchant, but 30% of transactions through PayPal:
- Shopify Payments on 70%: $2,380 + $350 = $2,730
- PayPal on 30% (3.4%+30p): $1,020 + $150 = $1,170
- Shopify 2% transaction fee on PayPal 30%: $600
- Total: $4,500. Effective rate: 4.5%
The payment mix changed the effective rate by a full percentage point — $1,100/yr more on $100K GMV.
Why this is the right number to compare platforms on
Marketing-page prices let you compare $39 vs $39 (Shopify Basic vs BigCommerce Standard). Effective rate lets you compare what you actually pay.
At $100K GMV with a UK/EU payment mix (Stripe 50%, PayPal 30%, Klarna 20%):
- Shopify Basic effective rate: ~4.2% (includes 2% tx fee on PayPal + Klarna)
- BigCommerce Standard effective rate: ~3.2% (0% tx fee on any gateway)
- WooCommerce effective rate: ~3.1% (0% tx fee; gateway fees only)
The 1% difference on $100K GMV = $1,000/yr. On $500K GMV = $5,000/yr. This is the number that matters.
See also: Transaction fee · Payment processing fee · GMV · Shopify review · Decision Wizard