Increased Fee in WooCommerce Payments

Here’s the email as it came into my inbox. You might have missed it so here it is. It’s talking about the increased feed in WooCommerce Payments

Announcement Email for Increased Fees in WooCommerce Payments

We’ll get to what these increased fees for WooCommerce Payments means in a second.

If the image above is too small to read, here it is in text:

Hello Brad,

We’re reaching out to inform you of an upcoming pricing change for WooCommerce Payments.

After careful analysis, we will be increasing fees for some of our merchants, including those in the United States. Specifically, when a customer buys from your store using a card issued outside of the U.S. an additional 1.5% fee will be charged, up from 1% today. This change will take effect on July 20, 2022. For more detailed information, review our pricing.

Please be assured that we make every effort to keep price increases to a minimum. This update will enable us to continue to provide a high quality payments service and add more features to help your store grow.

Thank you for trusting your business with WooCommerce Payments. If you have any questions about this change, please contact us.

Regards. The WooCommerce Payments Team

Here’s what the Increase in WooCommerce Payments actually means

…..let’s be sure to read this carefully.

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• 2.9% + $0.30 USD per transaction for U.S. issued card
  • +1% for transactions paid using a card issued outside the US
  • +1% for conversion of currencies other than USD

https://woocommerce.com/document/payments/faq/fees/#section-18

And here’s the section which has been modified over on the WooCommerce Payment’s Doc Page talking about the fees and rates charged for transactions

2.9 + 1 + 1.5

Credit Cards issued IN the United States TO a WooCommerce store in the United States is at STILL at the regular 2.9 percent of the transaction.

Credit Cards which are issued outside of the United States to a store which is located inside the United States is processed at 3.4 percent of the transaction (2.9% + 1.5%)

Credit Cards which are issued outside of the United States to a store which is located within the United States AND needs the currency converted is billed at 5.4 percent of the transaction (2.9%+1%+1.5%)

Let’s break down what those increased fees for the WooCommerce Payments actually looks like

Your store is in the U.S. and you get paid from someone in the U.S.

Let’s say that you’re store location is based out of Texas (🤠Howdy!) and you get paid from someone in Colorado 🌄

Great. If you’re using WooCommerce Payments, that fee will still be billed at the normal 2.9 percent. Again, WooCommerce Payments will still process that transaction at the regular fee of 2.9 percent.

Your store in in the U.S. but you get paid from someone using a card which has been ISSUED in another country

Let’s say your store is in Texas and you get paid from someone with a card issued in Canada. Now, instead of the WooCommerce Payments charging you the normal 2.9 percent, it will be increased to the amount of….. (get ready for this)

2.9 % (the normal, original fee) PLUS 1.5% (which is the new fee for ‘out of US’ issued cards) PLUS another 1% (because the customer paid in CAD not USD) for a total of FIVE POINT FOUR PERCENT

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Now, for those of us who’ve been around for a decade or more, we all know that WooCommerce Payments is basically a white labelled mesh of PayPal and Stripe.

So, did Stripe itself raise their rates? Nope.

Has there always been a 1% fee for international transactions within Stripe itself? Sure.
And there has always been an additional 1% fee for currency conversions within Stripe.

So the additional raising of the rates within the “WooCommerce Payments” plugin was done purely by the WooCommerce Payments team.

Is it only half a percent? Sure. Was there a justifiable reason for raising those rates within just the WooCommerce Payments gateway? There might have been.

Perhaps there were too many store owners making questionable transactions and the WooCommerce Payments team’s lawyers decided that they needed more cash in the purse.

So, what’s the SOLUTION to those increased fees in the WooCommerce Payments gateway?

It’s really simple: Switch it back to the regular Stripe for WooCommerce Payment Gateway.