There are two types of fees in NOWPayments – service fees that our platform charges and network fees that you pay to the blockchain for processing your transactions. Here, we explain how these fees work and how you can save on them.
Crypto Fees in a Nutshell
Before we delve into NOWPayments’ fees, let’s see how they work in crypto in general.
Network fees
Users pay this type of fee when they transfer coins from one wallet address to another. For example, your customers pay it when they make a purchase at your online store using cryptocurrency. This fee is paid to miners or validators to incentivize them to process transactions and keep the blockchain secure.
Network fee size depends on a particular coin and its blockchain congestion. We’re in the bear market now, the trading activity is relatively low – so are the fees. In December 2022, average network fees were $1-1.5 in Bitcoin and $0.3-0.5 in Ethereum. Network fees in the latter are dubbed as gas fees. Gas is the computing power that Ethereum validators have to use to process a transaction.
Network fees are not affected by transaction value: for instance, recently, Binance has transferred 127,000 Bitcoins in one single transaction and paid only $0.44 as a network fee. The total transaction value exceeded $2 billion.
Network fees vary widely from coin to coin. Bitcoin and Ethereum transactions are probably the most expensive. Many blockchains were later designed to reduce the cost of transactions. In BNB Smart Chain, network fees are between $0.14 and $0.18; they are even lower in TRON blockchain, and you pay less than $0.01 of fees in Bitcoin Cash, Litecoin, DigiByte, Ravencoin, Verge, and some other coins.
Service fees
Service fees are the fees that crypto platforms charge for using them. Centralized exchanges take trading fees – for example, Binance charges a small percentage from each crypto trade. Exchange services take exchange fees for making non-custodial swaps on their platforms.
NOWPayments takes 0.5% as a service fee from every transaction and a 0.5% exchange fee in case there’s a need to swap the coins.
Withdrawal fees
Custodial platforms where users store cryptocurrency allow for withdrawing funds to any wallet address. For sending the crypto outside the platform, many services charge withdrawal fees.
NOWPayments Custody doesn’t take withdrawal fees. All you need to pay to withdraw is a network fee.
Fees in NOWPayments
As mentioned above, in NOWPayments, there are service fees for using the platform and network fees paid to the blockchain.
The integration with our payment gateway is completely free – you are charged nothing until your customers start paying you in crypto.
Service fees in NOWPayments
Transparent system of fixed fees. There are only two types of service fees in NOWPayments, and they never fluctuate based on any factors – you can rest assured they remain the same all the time:
- A 0.5% fee for single-currency payments – when your customer pays you a certain cryptocurrency, and you receive this very coin in your wallet or in NOWPayments Custody.
- The same 0.5% fee for multi-currency payments + 0.5% for exchanging the coins, which is 1% in total. For example, your customer wants to buy something in Ethereum, and you only accept Bitcoin – the client pays in ETH, we convert crypto on the go, and you receive BTC.
You can specify who covers these fees – you or your customers. Manage this in your Personal Account (if you use invoices) or in API.
Generally, service fees are different across the market. Many payment gateways offer non-transparent and unpredictable fees. They aren’t clearly described and are not fixed, and you never know how much you’ll be charged. You only learn this after the payment is completed – and still don’t know how the fee was formed.
Some services take a double network fee (we explain these fees below) and some don’t share any precise information regarding the fees – they say they “start from 0.5%-1%”, which means fees can go to the moon. In NOWPayments, it’s always either 0.5% or 1%.
NOWPayments service fee decreases as your volume grows. The standard fee is 0.5%, but it can be lowered to 0.4% as your turnover increases. In your Personal Account, you can see your total volume calculated in Bitcoin during the last month. If it hits 50 BTC, we offer you a discount – the fee goes down to 0.45%. A 100+ volume in BTC gives you a 0.4% fee.
If your monthly turnover reaches the benchmark, contact your account manager and receive a rebate with the fee difference.
Network fees in NOWPayments
You can use NOWPayments in two modes. The first one is non-custodial: the funds go from your customers to NOWPayments deposit address, and then we send it to your wallet address. At the second step, merchants pay network fees in addition to service fees.
In the custodial flow, funds go from your clients to your NOWPayments Custody (you can enable it in your Personal Account), and no network fee applies. You only pay one when you decide to withdraw funds to your personal wallet address.
As we mentioned above, network fees depend on the chosen cryptocurrency and are often negligibly small. Bitcoin and Ethereum fees can reach $0.5-$1.5, while in many other coins, fees are less than a penny.
Keep in mind that fees are the same for any transaction volume – thus, one big transaction costs you less than many small ones.
When does NOWPayments Charge Fees?
- When your customer pays you in crypto, they send money to the NOWPayments deposit address. Your customer pays a network fee at this step.
- We process the payment, take a 0.5% service fee and a 0.5% exchange fee if a crypto swap is needed. These fees are paid either by the merchant or the customer, depending on the settings in your Personal Account or API.
- If you work in a non-custodial flow, we transfer the funds from NOWPayments deposit address to your crypto wallet. The merchant pays a network fee at this step.
If you’ve enabled the custodial flow, we send the funds to your NOWPayments Custody, no network fees apply.
How Do I Pay Less?
Network fees
- Enable Custody – the funds will accumulate in your NOWPayments account, and you won’t have to pay network fees for every withdrawal.
- Network fees vary during the day. Before withdrawing your funds from Custody, make sure it is a good moment in terms of network fees.
- Network fee is the same for transactions with low and high value. If you work in non-custodial flow, think of how you can cut the number of transactions without losing your revenue.
- Some altcoins offer negligible network fees. Consider accepting coins with lower fees, your customers will also be happy to pay less.
Service fees
- Increase your volume and get a discount: 0.45% service fees for a 50+ BTC monthly turnover and 0.4% if you surpass 100 BTC.
- Increase the share of single-currency payments in your total volume and save on 0.5% exchange fees.
Summary
NOWPayments has a fixed service fee for all transactions – 0.5% for single-currency payments and 1% for multi-currency ones (if your customer pays you in one coin and you only accept another). The conversion is done automatically.
Every transaction (in non-custodial flow) is also charged with a network fee – it is paid to transfer funds from NOWPayments’ deposit address to your personal wallet address. Bitcoin and Ethereum have the highest fees, they are lower in TRON, BCH, LTC, and many other coins.
In the custodial flow, you can save on network fees: you will pay them not from every transaction but only when you withdraw funds from Custody. Other ways to save on fees include accepting coins with low network fees, increasing the share of single-currency payments, and growing your volume.