Want to Sell Online? A Must-Have That You Probably Don't Know About

Starting an online business? Congratulations! But before you celebrate your first online sale, there’s something crucial you need to understand: payment gateway fees. Most new business owners get a nasty shock when they see these charges for the first time. Let’s break it down in simple terms.

What Exactly Are Payment Gateway Fees?

Think of a payment gateway as the digital equivalent of a cash register and bank teller combined into one. When a customer buys something from your online store, the payment gateway handles everything from processing their credit card to transferring the money to your bank account.

Here are some examples of what it can do for you:

• Collect payment.
• Ensure it reaches your bank account.
• Send Receipts & many more.

But here’s the thing: that got most business owners irked – this convenience comes with a cost.

The Stripe Reality Check

Stripe, is a payment gateway company. It enables online shops to allow buyers enter their payment details to make their purchases right away.

Let’s talk numbers. Stripe, one of the most popular payment gateways, charges:

• 2.9% + $0.30 per transaction for online payments
• 2.7% + $0.05 for in-person payments (with their card reader)

So if you sell a $100 item online, you’ll pay:

• 2.9% of $100 = $2.90
• Plus $0.30 fixed fee
• Total: $3.20 per sale

That means you only keep $96.80 from that $100 sale. Ouch, right?

*Rate may change from the time of writing this post.

The PayNow Reality: Why Most Singapore Businesses Are Stuck in Manual Mode

If you’re in Singapore, you’re probably familiar with PayNow – it’s everywhere! Most small businesses selling through Instagram, Facebook, or WhatsApp follow this exact process:

1. Customer DMs asking about a product
2. Send them a Google Form to fill out their order details
3. Calculate the total and reply with the price
4. Send a PayNow QR code for them to scan
5. Wait for screenshot of their payment confirmation
6. Manually check bank account to verify the payment actually came through
7. Send confirmation and process the order

Sound familiar? This works fine when you’re selling 5-10 items a week. But here’s the scary question most business owners don’t ask:

What happens when you want to scale to 50 orders a day? Or 500?

This issue was solved for a client of mine, a solo business. He sells drinks online, he did the whole production alone. From making the drink, packaging, ingredients and stock management, you name it.

That one guy alone made five-figure sales per month from drinks. That’s thousands of bottles.

And that, my friend, his orders just keep coming in without him worrying about checking if every transaction went through.

Why Can’t You Just Skip Payment Gateways?

Let’s do the math on manual PayNow processing:

The Manual PayNow Time Trap

Let’s say each manual transaction takes you 5 minutes (checking form, calculating price, sending QR code, verifying payment, confirming order):

• 10 orders/day = 50 minutes of payment processing
• 50 orders/day = 4+ hours just handling payments
• 100 orders/day = Your entire day is gone

And that’s assuming everything goes smoothly! What about when:

• Customers send unclear screenshots?
• Payment amounts don’t match exactly?
• You miss a payment notification while sleeping?
• Someone sends a fake screenshot? (Yes, it happens!)

The Scaling Nightmare

Here’s what really happens when successful manual PayNow businesses try to scale:

Missed Payments: With hundreds of transactions, some payments slip through the cracks. You’re manually cross-referencing screenshots with bank statements – it’s a nightmare.

Customer Frustration: “I paid 3 hours ago, where’s my confirmation?” When customers wait too long, they start demanding refunds or leaving bad reviews.

Cash Flow Confusion: Which payment belongs to which order? When you’re juggling dozens of transactions daily, tracking becomes impossible.

No Sleep: Customers pay at all hours, but you’re the only one who can confirm their orders. Your phone becomes your prison.

The Trust Problem

Lost Sales: Studies show that 70% of online shoppers abandon their cart if the payment process is complicated. Make it too manual, and you’ll lose most of your potential customers.

Oh and you missed out credit card users. You see, financial institutions like banks and digital banks offers rebates, points and rewards.

You will be surprised to see the number of shoppers who only shop using their cards, just because of the rewards it offers. Sure it’s not much of a value, but the reward points will definitely accumulate with other expenses for the card holder.

How Payment Gateways Save Your Sanity (And Your Business)

Imagine this instead: Customer clicks “Buy Now” → Payment processes instantly → They get immediate confirmation → Money appears in your account → Order automatically goes to fulfillment.

No screenshots to verify. No bank accounts to check. No 3 AM payment confirmations.

Here’s what happens when you integrate PayNow (or other local payments) through a proper payment gateway:

Instant Everything

• Customer pays → Order confirmed in 2 seconds
• Payment verified automatically → No more screenshot hunting
• Inventory updated in real-time → No overselling
• Customer gets proper receipt → Professional impression

Scale Without Stress

• Handle 1,000 orders with the same effort as 10 orders
• Process payments while you sleep
• Automatic reconciliation with your accounting
• Built-in fraud protection

Professional Credibility

Your customers get a proper checkout page instead of “Please fill this Google Form and send screenshot.” Which business would you trust more?

The Platform Trap: Why Shopee and Lazada Cost More

“But wait,” you might think, “I’ll just sell on Shopee or Lazada instead!”

Hold that thought. Here’s what these platforms actually charge:

Shopee Fees:

• Commission: 3-5% per sale
• Payment processing: 2-3%
• Shipping fees: Variable
• Total: Often 6-8% or more

Lazada Fees:

• Commission: 2-4% (depending on category)
• Payment processing: 2%
• Fulfillment fees: 3-15%
• Total: Can reach 10-20%

So that $100 item? You might only keep $80-90 after platform fees – much worse than Stripe’s $96.80!

Plus, you’re building their customer base, not yours. When customers buy from you on Shopee, they’re Shopee’s customers, not necessarily yours.

Oh and that platform is not controlled by you, once your product got reported, they straight up ban your products with robotic replies when you appeal. You do not want that.

Better Payment Gateway Alternatives for Businesses in Singapore

While Stripe is great, it’s not your only option. Here are two alternatives that might work better for businesses in Asia:

HitPay

Pricing: 2.3% - 3.5% per transaction (lower than Stripe in many cases)

Why it’s better for Asian businesses:

• Supports local payment methods (PayNow, GrabPay, etc.)
• No monthly fees
• Same-day payouts available
• Built specifically for Southeast Asian markets
• Easy integration with local banks

Here is the link https://hitpayapp.com/

Chip-In Asia

Pricing: Competitive rates similar to HitPay

Advantages:

• Strong focus on Malaysian and regional markets
• Supports FPX (Malaysian bank transfer)
• Local customer support in multiple languages
• Understands local business needs

Here is the link https://chip-in.asia

The Bottom Line

Yes, payment gateway fees hurt at first. But they’re not optional if you want to run a serious online business. The question isn’t whether to pay them – it’s which gateway gives you the best value.

Imagine you hire someone to handle payments - checking purchases, processing refunds, and tracking orders.

Can one person handle 100 orders per day? What about 500? You don’t want to keep hiring more people as your business grows.

Let’s look at the costs. An employee costs about S$3,000 per month (including salary, CPF, and benefits). Payment gateways charge around 4.5% of your sales.

If your monthly sales are S$70,000, the payment gateway costs S$3,150 - about the same as hiring someone.

But what if your sales are only S$10,000 to S$30,000? The payment gateway would cost S$450 to S$1,350. Does it make sense to pay S$3,000 for an employee when the automated solution costs much less?

Well, that was just one of the examples. There are many other aspects that payment gateway can help you grow.

Consider this: if payment gateway fees help you process payments 24/7, build customer trust, and automate your business operations, isn’t 4.5% a small price to pay for professional growth?

Your business isn’t just losing 4.5% per sale – it’s gaining the infrastructure to scale, the credibility to compete, and the automation to focus on what really matters: growing your business.

And the deduction of 4.5% is the average on the higher end fees. Usually it’s lower, especially when they use PayNow with payment gateway, not to be confused with manual PayNow process we discussed earlier.

Action Steps

1. Calculate your break-even point: How many sales do you need to cover the gateway fees?
2. Compare total costs: Don’t just look at processing fees – factor in your time, lost sales from manual processes, and platform commissions
3. Start with one gateway: Pick HitPay, Chip-In, or Stripe and get started. You can always switch later
4. Factor fees into pricing: Build the 3% cost into your product prices from day one

Remember: every successful online business pays these fees. The ones that thrive are those that see them as an investment in growth, not just another expense.

Ready to set up your payment gateway? Start with the one that best serves your target market and customer base. Your future self will thank you for making online payments seamless from day one.