Gateway fees, and why they are often billed by somebody else.
A gateway is the software that carries a card-not-present transaction from your website or virtual terminal to your processor. It is usually a separate product with a separate price, and frequently a separate invoice — which is why so many merchants work out their processing cost and miss it entirely.
What this page settles.
Three questions, in the order most people ask them.
What a gateway actually does
When a card is physically present, the terminal talks to your processor and that is the whole chain. When it is not — a website checkout, a phone order keyed in, an emailed invoice, a subscription billed monthly — something has to collect the card details securely and hand them over. That something is the gateway.
It does three jobs worth knowing about:
- It takes the card data and encrypts or tokenizes it, so the number never sits on your own systems. This is a large part of why your PCI obligations are as light as they are.
- It routes the authorization to your processor and brings back the answer.
- It stores the card, when you need recurring billing or repeat customers, in a vault that belongs to the gateway rather than to you.
That last one matters more than it sounds. The vault is why changing gateway is harder than changing processor, and why a badly planned switch can mean asking every subscription customer to re-enter their details.
The charges, one at a time
There are five, and most merchants are paying at least two.
Monthly platform fee. A flat charge for having the gateway. Charged whether you take one transaction or ten thousand, which makes it another of the fixed costs that hurt small volumes most.
Per-transaction fee. Charged on each authorization through the gateway — and note that is in addition to the per-item fee your processor charges. A keyed sale can carry two separate per-transaction charges, one from each company.
Setup fee. One-off. Frequently waivable if you ask before signing.
Feature charges. Tokenization, the customer vault, recurring billing, account updater, fraud screening, 3-D Secure. Some gateways bundle these, some price each one. Account updater — which refreshes stored cards when your customer’s bank reissues them — is worth paying for if you bill on a schedule, and worth knowing about if you do not.
Batch or gateway settlement fee. Less common, but some gateways charge per batch as well as the processor doing so.
None of these is unreasonable on its own. The problem is that they are quoted in isolation and added up by nobody.
Why it is often invoiced separately
This is the part that distorts the arithmetic.
Your processing statement covers what your processor charged. If your gateway is a separate company — Authorize.net, NMI and others are sold through thousands of resellers — then its charges arrive on a separate invoice, often by email, often to whoever set the account up rather than whoever pays the bills.
Three consequences follow:
Your effective rate is wrong. If you divide statement fees by card volume and the gateway is not in the numerator, you have understated your cost. On a business taking mostly card-not-present payments, that understatement can be substantial.
Quotes are not comparable. A provider who bundles the gateway looks more expensive than one who does not mention it. Ask every provider the same question: what is the all-in monthly cost including gateway, on my volume?
It survives a switch. Cancelling your processing agreement does not cancel your gateway contract. This is the same trap as the equipment lease in a different costume, and it catches people the same way.
If you are working out what card acceptance costs you, go and find the gateway invoice before you do the sums. A surprising number of merchants discover they have been paying for two gateways, one of them connected to a website that was replaced two years ago.
Do you need one at all
Sometimes not, and it is worth asking.
A shop with a standalone terminal generally does not. The terminal talks to the processor directly.
A business that takes the occasional phone order might be able to key it into the terminal rather than paying for a virtual terminal, depending on the hardware. Worth asking, because it is the difference between a monthly fee and none.
A business selling through Shopify, WooCommerce or similar needs a gateway, but the platform may include one or integrate with several, and the choice affects both cost and how hard it is to leave later.
A business with recurring billing absolutely needs one, and should choose it with more care than anything else on this list, because the vault is the thing that locks you in.
One honest caution: skipping a gateway by keying card numbers into something that was not built for it is not a saving. It moves card data onto your own systems, which raises your PCI obligations substantially and makes a card-not-present downgrade more likely on every transaction.
What to check before you sign
Five questions, and they take one phone call.
- What is the monthly fee, and what is the per-transaction fee? Both, separately, in writing.
- Which features cost extra? Specifically tokenization, the customer vault, recurring billing and account updater.
- Who bills me — you or the gateway? If it is the gateway, you want to see that invoice before you agree to anything.
- Is the gateway portable? If you leave this processor, does the gateway come with you, and does the vault come with it?
- What is the contract term on the gateway itself? It is frequently different from the processing agreement, and it is frequently longer.
Ask the fifth one even if you are happy. It is the cheapest question on this page and the one most likely to save you money two years from now.
What we charge
Interchange + 0.50% + 10¢ in person, interchange + 0.75% + 25¢ keyed, with no contract, no monthly fee and no PCI fee. Where you need a gateway we will tell you what it costs as part of the quote, not afterwards.
Send us a statement — and the gateway invoice if it comes separately — and we will give you one all-in number with everything counted. That is the only version of your cost that is worth comparing with anybody.
While we are on the subject
Is a gateway the same as a processor?
No. The gateway carries the transaction and the processor moves the money. Some companies sell both and bundle the price, which is why the distinction gets blurred.
Do I need a gateway for a card machine in a shop?
Usually not. A standalone terminal connects to the processor directly. You need a gateway when payments come from a website, a virtual terminal, an invoice link or recurring billing.
Can I keep my gateway if I change processor?
Often yes — gateways like Authorize.net and NMI work with many processors. It is worth confirming before you switch, because the alternative is re-entering every stored card.
Does PosNexus charge a gateway fee?
It depends on what you need, and we will tell you the number before you sign rather than after. What we will not do is leave it off the quote and let it turn up on a separate invoice.