Are payment fees quietly killing e-commerce margins?

I think payment fees are one of the most ignored margin killers in e-commerce.

A lot of merchants obsess over ads, conversion rate, AOV, email flows, shipping costs, supplier terms, packaging, fulfilment, returns…

But then at checkout, 2–4% quietly disappears on every single order.

That might not sound huge until you realise a store doing €1m/year in revenue can easily be losing €25k–€40k/year just to payment processing.

For a business running on 10–20% net margins, that is painful.

This is the problem we’re trying to solve with Zahlo.

Zahlo is a VC-backed EU/UK payment method for online merchants.

The simple version:

Merchants add Zahlo alongside their existing checkout options. Customers can then pay through a bank-based checkout, while the merchant pays a 1% transaction fee, gets instant payouts, and avoids chargeback risk.

We’ve already launched with 1,000+ merchants and are now onboarding larger merchants too, including conversations with brands like Smartbox and Vestiaire Collective.

Setup takes around 10 minutes and works across platforms like WooCommerce, Ecwid, custom stores, and other major e-commerce setups.

The interesting part is that we’re not asking merchants to replace their existing provider.

Stripe, PayPal, Klarna, cards, Apple Pay, etc. can all stay.

Zahlo just becomes an extra lower-cost option at checkout.

The way I see it, if even 10–20% of checkout volume shifts to a lower-fee rail, that can create a meaningful margin improvement without needing to increase prices, cut ad spend, or renegotiate supplier contracts.

Curious how other founders think about this:

Have you ever actually calculated how much your business loses each year to payment fees?

And if you run an online store, would you add a lower-fee payment option if it sat alongside your current checkout rather than replacing it?

Website here for anyone curious: https://zahlo.eu