Cost per transaction is a measure of how much it costs, on average, to process one payment. It is calculated by dividing all payment-related costs over a period by the number of transactions in that period. Merchants use it to compare payment methods and providers, and payment companies and banks use it to judge the unit economics of a product.
For a merchant accepting cards, the costs include the interchange fee, scheme fees, the acquirer's margin, any gateway per-transaction fee, fraud tools, and the cost of chargebacks and refunds. Because many fees are percentages, the result is often stated as a share of sales as well as an amount, a figure related to the blended transaction cost. For a processor, the measure covers infrastructure, network connections and support, and it falls as volume grows because many of these costs are fixed. Reducing it is the aim of payment cost optimization.