I Worked Out What Our Payments Actually Cost

Someone asked whether accepting crypto was worth it for us. I could not answer without knowing what our existing payments cost, and I had never calculated it properly. For anyone in the same position, a crypto acquiring provider sets out the same terms without requiring an account.

What I added up

A full year. Card processing fees. Bank transfer fees, both what we paid and what clients paid that reduced what reached us. Currency conversion margins on international payments. Failed and returned payments and the time spent on them. And invoices we had written off because the client could not pay us in a way that worked.

The total

Considerably higher than the card rate suggested, because the card rate only covers the card payments.

The international transfers were the expensive part: a flat fee plus a conversion margin, on invoices where our margin is thin.

And two write-offs from clients in countries where receiving payment reliably was genuinely difficult.

What I had been comparing

Card rates. Which are about a fifth of what we actually pay for payments, and the part I had the least ability to change.

Where crypto helped

Almost entirely on the international invoices.

A transfer costing about a dollar and arriving in minutes, against fifty euros and four days, on the invoices where the cost was worst. Once other people needed access, this became a question for crypto rails built for fintech companies instead.

Where it did not

Domestic card payments. Cards work, customers have them, and nobody wanted an alternative.

Offering it there changed nothing and cost nothing, which is the right outcome for an option nobody uses.

The measurement that mattered

Offering it for a quarter without a discount, and counting.

A discount would have measured the discount. Without one, I learned that a fifth of business clients chose it and four percent of individuals did.

Both numbers were wrong in my head beforehand, in opposite directions.

What I would tell someone asking whether it is worth it

Work out what your payments actually cost, including the parts that are not fees.

If the number is uncomfortable, there is probably a case. If it is not, there probably is not, and no amount of enthusiasm about the technology changes that. If you want to see all of this in a real product rather than in my account of it, an exchange that publishes its full terms publishes the terms.

Most people have never done the calculation, and it takes an afternoon with a year of statements.