On recurring revenue, the fee you pay every month for the life of every customer compounds in a way one-off payments do not. Subscriptions and invoices carry no additional Paydude percentage, which on a subscription business is frequently a larger difference than the headline rate.
Where the fee actually lands
Payment processing is a cost of goods sold: it scales with revenue and it recurs every month a customer stays. That means it reduces gross margin, and gross margin is what determines lifetime value.
| Plan price | At 2.9% + 30¢ | At 2.6% + 25¢ | Saved per customer per year |
|---|---|---|---|
| $19 | $0.85 (4.5%) | $0.74 (3.9%) | $1.32 |
| $29 | $1.14 (3.9%) | $1.00 (3.4%) | $1.68 |
| $49 | $1.72 (3.5%) | $1.52 (3.1%) | $2.40 |
| $99 | $3.17 (3.2%) | $2.82 (2.8%) | $4.20 |
Per customer these are small numbers. Across 2,000 customers on a $29 plan, the last column is roughly $3,400 a year — and it recurs, with no acquisition work behind it.
Why the fixed fee matters more on cheap plans
At $19 a month, a 30¢ fixed fee is 1.6% on its own. At $99 it is 0.3%. If your entry tier is low-priced — and most SaaS ladders start low — the fixed fee is where the difference between providers actually shows up.
The other subscription cost
Failed payments are usually a larger number than the fee difference. Between 5% and 12% of subscription charges fail in a given month, mostly because cards expire or are reissued rather than because anyone decided to leave.
That is involuntary churn, it is typically 20–40% of total churn, and 60–80% of it is recoverable. Worth sizing with the failed payment revenue calculator before optimising anything else.
GOOD QUESTIONS
Frequently asked
Does Paydude charge extra for subscriptions?+
No. Subscriptions and invoices carry no additional Paydude percentage — recurring billing sits in the same API as processing rather than being a separate priced product. On a recurring-revenue business that difference is often larger than the headline rate gap.
How much do payment fees cost a SaaS business?+
Typically 3–4% of revenue on a $29–$50 monthly plan once the fixed fee is included. It sits in cost of goods sold, so it comes straight out of gross margin and therefore out of LTV.
Does Paydude handle failed subscription payments?+
The API covers subscriptions, payments and webhooks, so retry logic and dunning are things you build on top with the events the platform emits. Involuntary churn is worth measuring separately — it is usually 20–40% of total churn and far more recoverable than voluntary churn.
Is Paydude suitable for a small SaaS?+
There is no volume floor and no monthly platform fee, so rates apply from the first transaction. The one thing to know is the $5 monthly difference charge, which applies only if the account generates under $5 of processing revenue in a month.