A good revenue share agreement with a payments service provider depends on various factors including your software platform’s volume of transactions, the average transaction size, industry standards, and the services provided by the payment provider. Typically, revenue share agreements with payment service providers range from 1% to 5% of the transaction value. However, some factors might influence this range:
- Volume of Transactions: Higher transaction volumes often lead to lower revenue share percentages as providers can benefit from economies of scale.
- Average Transaction Size: Providers may adjust their revenue share based on whether your platform deals with large or small transactions. Higher-value transactions might result in a lower percentage share.
- Value-Added Services: If the payment provider offers additional services like fraud prevention, data analytics, or international payment support, they might justify a higher revenue share.
- Negotiation Power: Your negotiating leverage based on your platform’s popularity, potential for growth, and competition in the market can influence the terms of the revenue share agreement.
- Industry Standards: Understanding what competitors or similar platforms are paying for similar services can provide a benchmark for negotiation.
- Fixed vs. Variable Fees: Some agreements might include a combination of fixed fees per transaction along with a revenue share, so it’s essential to consider the entire fee structure.
- Contract Duration: Longer-term contracts might offer more favorable revenue share terms.
Ensure to negotiate terms that align with your platform’s financial goals while providing a fair return for the services rendered by the payment provider. It’s also advisable to consult with legal and financial experts to ensure the agreement protects your interests and is compliant with relevant regulations.
About Usio
Usio, trusted with billions of dollars in transactions, is a leading fintech payment solution. The Usio Platform delivers the most secure, simple and cost-effective integrated payment experience for our partners and their customers. Plus, Usio holds the unique distinction of being in business for more than 25 years and is just one of few who is Nacha Certified. Usio is also a PCI Level 1 processor ensuring the highest level of security available with developer and merchant support.
Learn more about Usio Integrated Payments Solutions at usio.com/integrated-payments/.
