What a 1% Platform Fee Actually Costs a One-Person Business
A percentage does not feel like money. That is the whole trick of it.
When a tool tells you it charges "just 1% per transaction", your brain files it next to sales tax — a rounding error, the cost of doing business. It only turns back into money when you multiply it by a year, and by then you have already sent four hundred invoices through it.
So let's do the multiplication first.
The number nobody puts in dollars
Take a small trade or services business. Twelve invoices a month, averaging $850. That is not an ambitious business — that is one person with a van, a diary and a phone.
- Invoiced in a year: $122,400
- A 1% platform fee on that: $1,224
- A 2% platform fee: $2,448
One thousand two hundred dollars. That is a laptop, or a month of a mortgage payment, or the difference between taking two weeks off in the summer and taking none.
The uncomfortable part is that this is not the card processing fee. That is a separate line, and it is unavoidable — someone has to move money off a card and that costs real money. The percentage above is the markup a platform adds on top, for the service of letting you press "send".
Two fees, one line item
Here is where it gets murky. Most invoicing tools present a single blended rate. You see "2.9% + 30¢" or "3.4%" and you assume that is the processor's price.
Sometimes it is. Often it is the processor's price with a slice added — and because it arrives as one number, you have no way to tell which part is the card network and which part is the software.
The way to separate them is to ask a direct question:
Whose account does the money land in first — mine, or yours?
If the answer is "ours, and then we pay out to you", the platform is a payment facilitator. It is in the money path. It is charging you for being there, and that charge can be adjusted at any time by a pricing page update you will find out about in a changelog.
If the answer is "yours, directly", the platform is not in the money path at all. Its fee is whatever it charges you for the software, and the processor's published rate is the processor's published rate.
What "0%" means when we say it
ScanThisText's Business plan sends pay-by-card links, and we take 0% of what you invoice.
That is not marketing generosity, it is an architecture. When you connect your card processor, invoices are charged against your own connected account. Your customer pays; the money settles to you at the processor's published rate, billed to you by them. We never hold it, never route it, and never deduct from it — there is deliberately no platform fee field set on the checkout sessions we create.
What we charge instead is a flat subscription. It does not move when you have a good quarter. A $50,000 month and a $5,000 month cost exactly the same to run through the software, so they are priced the same.
The honest consequence of a flat fee is that it is worse for you at low volume. Which brings us to the part most pricing pages leave out.
When a percentage is genuinely the better deal
If you send two invoices a month at $300 each, a 1% platform fee costs you $72 a year. A flat subscription almost certainly costs more. Take the percentage. Seriously — you are not the customer a flat plan is built for, and paying for capacity you do not use is its own kind of leak.
The switch happens at the break-even point, which you can work out in one line:
break-even invoices per month = annual plan price ÷ (average invoice × fee rate × 12)
At $850 an invoice against a 1% fee, an annual Business plan pays for itself somewhere around four invoices a month. Under that, a percentage wins. Over it, every additional invoice you send is money that used to leave and now doesn't.
There is a slider version of this on the Business page where you can put your own numbers in — your invoice count, your average value, and critically the rate you are currently paying, not one we picked to flatter ourselves.
Four questions to ask before you send an invoice through anything
Whatever tool you land on, ours or otherwise, these are worth asking in writing:
- What is the processor's published rate, stated separately from your fee? A tool that cannot split those two numbers is telling you something.
- Whose account does the payment settle into? Yours means the fee is a software fee. Theirs means you are a passenger in your own cash flow.
- What happens to a payment link if I cancel? Money in flight when a subscription lapses is a genuinely bad afternoon. Find out before, not during.
- How does the fee change as I grow? Percentages compound with your success. That is fine if you know it, and unpleasant if you find out in year three.
The part that isn't about money
There is a second cost to a percentage that never shows on a statement: it changes what you do.
People with a per-transaction fee batch their invoicing. They wait until Friday, send six at once, and quietly stop billing for the small jobs because $40 minus a fee minus the effort is not worth the trip to the laptop. The fee did not just take a slice — it made you invoice less often, later, and for fewer things.
Flat pricing removes that calculation. You bill the $40 callout from the driveway because there is no reason not to, and the customer pays it that evening while it is still fresh in their mind rather than three weeks later when it has become a negotiation.
That behaviour change is usually worth more than the fee itself, and it is the reason this page exists.
Do the multiplication
You do not need our calculator or anyone else's. Open your accounting software, find what you invoiced in the last twelve months, and multiply it by the rate you are paying above card processing.
Whatever number comes out is being spent every year on the privilege of pressing send. Decide whether that is a fair price for what you get. Sometimes it is.
Just make the decision on purpose, with the number in dollars in front of you, instead of on a percentage that never quite feels like money.
Want to see the arithmetic on your own numbers? The Business plan includes pay-by-card invoice links that settle to your own processor account, with a seven-day trial and no card required to start.
