Afterpay Fees for Merchants: The Real Cost Behind a $451 Order
Why we made the video
Recently one of our TikToks about Afterpay fees for merchants went viral… and then Yahoo Finance reached out. Wild.
The whole point of that video wasn’t to whinge, it was purely awareness. It genuinely made us wonder: do customers actually know what it costs a business to offer Afterpay?
Real example: $451 order → $30.14 in fees
Perfect timing too, because we’d just received an order for $451.00 and the Afterpay related fees on our end were $30.14. That’s roughly 6.7% of the sale gone before we’ve even packed the order.
Here’s what most people don’t realise: Afterpay merchants (yep, the small business owners) generally pay:
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a fixed fee per transaction, and
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a percentage of the total order.
And depending on how your checkout is set up (hello, Shopify), there can be additional payment processing fees too because it’s often treated like a card transaction. And just to keep it spicy, those rates can vary from store to store.
Why we still offer Afterpay
So why do we offer Afterpay if it bites our margins? Simple: it can boost conversion and it gives customers flexibility. It helps people buy what they want now, without missing out. The downside is the fees can take a decent chunk, so the margin takes the hit.
What customers can do (no guilt)
If you’re a customer reading this: if you can pay by card, it helps small businesses keep more of the sale. But if you need Afterpay, use it, seriously. We’d rather you get your tees, hoodies & headwraps than miss out.
Important: we can’t add surcharges
One important note: Afterpay agreements don’t allow surcharges, so businesses can’t add an extra “Afterpay fee” at checkout even if we wanted to.
How merchants can protect margins
And if you’re a business owner offering Afterpay (or thinking about it), there are ways to protect your margins without punishing customers like small pricing adjustments across products, bundles/multi-buys, smart upsells and building your email/VIP list so you’re not paying to re-acquire the same customer forever.
FAQ
Do Afterpay fees vary between stores?
Yep. Afterpay’s merchant fee is a fixed fee + a percentage, and it can differ based on your merchant agreement and whether the transaction is online vs in-store. Afterpay
Why offer Afterpay if fees are high?
Because it can lift conversions and increase average order value (more people check out, and they often spend more). Afterpay literally sells it as a conversion/AOV booster, and many merchants see it as “pay the fee to make the sale.”
Can merchants charge an Afterpay surcharge?
Not an Afterpay-specific one. Afterpay’s merchant agreement says you must not impose a surcharge or increase price/shipping/fees because the customer used Afterpay.
(There’s a narrow in-store carve-out for a general card-surcharge policy, but you still can’t whack on an “Afterpay fee” just because they used Afterpay.) Merchant Terms
