Payment processing fee
The per-order fee Etsy Payments charges to handle credit card and bank transactions.
- US rate: 3% + $0.25 per order
- Varies by country: each Etsy seller country has its own % + flat fee
- Charged on: order total (item + shipping + tax + tip)
- In addition to: 6.5% transaction fee and any ad fees
Payment processing is what Etsy charges for handling the actual money - the credit card swipe, the bank transfer, the fraud screening. In the US it’s 3% + $0.25 per order. In other Etsy seller countries it varies; a UK seller pays roughly 4% + £0.20, a Canadian seller pays 3% + CA$0.25.
This is separate from the 6.5% transaction fee. The transaction fee is what Etsy charges to be the marketplace; the payment processing fee is what Etsy Payments charges to be the payment processor. Both come out automatically from your sale.
What the fee is calculated on
The order total including item price, shipping, tax, and any tip. Yes, you pay processing on the sales tax that you don’t keep - that’s because the processor still has to move that money from card to bank.
Why small orders hurt margin
The flat $0.25 component is brutal on low-priced items. A $3 sticker becomes:
- Transaction fee: $0.20
- Processing fee: $0.34
- Listing fee: $0.20
- Etsy’s take: $0.74 on a $3 sale - about 25%, before ad fees.
Bundling small items, or pricing them with a minimum quantity, is how most sellers protect margin in low-AOV categories.
- Listing single low-cost items where the flat $0.25 swallows your margin.
- Forgetting that processing applies to refunds too - refunding an order returns the item price but not Etsy's processing fee.
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