Invoice Software With Lowest Transaction Fees: Options That Keep More Money in Your Pocket

When you’re running your own business, every penny counts—especially those pennies that silently disappear with each invoice payment. Transaction fees might seem small individually, but they can add up to thousands of dollars annually that could otherwise fund your business growth or, dare I say it, your next vacation.

I’ve spent years watching these fees eat into my profits and have tested virtually every invoicing platform on the market. The truth? Most providers aren’t exactly forthcoming about their complete fee structures until you’re already invested in their ecosystem. Let’s change that.

Understanding the True Cost of Invoice Payments

Before diving into specific platforms, let’s break down what actually makes up those transaction fees:

• Processing fees: The percentage taken from each transaction (typically 2.5-3.5%)
• Fixed fees: The flat amount charged per transaction (usually $0.15-$0.60)
• Monthly subscription costs: What you pay just to access the software
• Hidden fees: Currency conversion, chargeback fees, and other sneaky costs

The lowest advertised rate isn’t always the cheapest option when you factor in all these components. Let’s examine which platforms actually deliver the best value.

The Lowest Transaction Fee Options in 2025

1. Wise Business (Formerly TransferWise)

Best for: International businesses and those accepting multiple currencies

Wise has disrupted the payment processing world by offering genuinely transparent fees that are substantially lower than traditional providers.

Key Transaction Fees:

• ACH transfers: 0.7% (capped at $1)
• Debit card payments: 1.5% + $0.25
• Credit card payments: 2.2% + $0.25
• International payments: No markup on exchange rate + small conversion fee (typically 0.4-0.7%)
• Monthly fee: $0

The Fine Print:

Wise doesn’t offer as many invoicing features as dedicated invoicing software, but its payment infrastructure can be integrated with most major invoicing platforms. The savings on international payments are substantial—often 3-5x cheaper than traditional banks or PayPal.

Learn more about Wise Business

2. Square Invoices

Best for: Small businesses with occasional invoicing needs

Square’s free invoicing platform has become increasingly popular due to its combination of zero monthly fees and straightforward transaction pricing.

Key Transaction Fees:

• Card payments: 2.9% + $0.30 per invoice
• ACH bank transfers: 1% (min $1)
• In-person payments: 2.6% + $0.10
• Stored card details: 3.5% + $0.15
• Monthly fee: $0

The Fine Print:

Square’s free plan includes unlimited invoices, estimates, and clients. The platform is particularly cost-effective for businesses with lower invoice volumes or those who primarily accept in-person payments. Their ecosystem also includes point-of-sale options that integrate seamlessly.

Check out Square Invoices

3. Zoho Invoice

Best for: Budget-conscious small businesses with moderate invoicing needs

Zoho has positioned itself as the value champion in the invoicing space, offering robust features at minimal cost.

Key Transaction Fees:

• Card payments: Varies by payment gateway (typically 2.9% + $0.30 through Stripe integration)
• ACH transfers: Varies by gateway (as low as 0.8% through certain integrations)
• Monthly fee: $0 for up to 1,000 invoices annually

The Fine Print:

Zoho Invoice itself doesn’t charge transaction fees—instead, you connect your preferred payment processor. This flexibility allows you to shop around for the lowest rates or use different processors for different types of transactions. The platform itself is free for businesses sending up to 1,000 invoices per year.

Explore Zoho Invoice

4. Wave

Best for: Solopreneurs and very small businesses

Wave offers completely free invoicing software but makes its money on payment processing fees.

Key Transaction Fees:

• Credit card payments: 2.9% + $0.60 (3.4% + $0.60 for Amex)
• ACH bank payments: 1% (min $1)
• Monthly fee: $0

The Fine Print:

Wave’s higher per-transaction fixed fee ($0.60 vs the industry standard $0.30) makes it less economical for businesses processing many small transactions. However, the completely free accounting and invoicing features make it attractive for businesses on a tight budget.

Visit Wave

5. Stripe with Custom Integration

Best for: Tech-savvy businesses with higher transaction volumes

While not an invoicing platform itself, Stripe’s payment infrastructure can be integrated with various invoicing tools or your own custom solution.

Key Transaction Fees:

• Standard online payments: 2.9% + $0.30
• ACH direct debits: 0.8% (capped at $5)
• International cards: Additional 1%
• Currency conversion: Additional 1%
• Volume discounts: Available for businesses processing over $80,000 monthly

The Fine Print:

Stripe requires more technical setup than all-in-one solutions, but its transparent pricing and extensive API make it ideal for businesses with specific needs or higher volumes. Many invoicing platforms (including some free ones) can integrate with Stripe, giving you powerful features without the higher transaction fees of all-in-one solutions.

Discover Stripe

Comparison Chart: Transaction Fees at a Glance

Beyond Transaction Fees: Hidden Costs to Watch For

The advertised transaction fee isn’t the whole story. Here are other costs that can significantly impact your bottom line:

1. Chargeback Fees

When a customer disputes a charge, you’ll typically pay:

• PayPal: $20 per chargeback
• Stripe: $15 per chargeback
• Square: $0 (they absorb the cost)
• Wise: $15 per chargeback

2. Currency Conversion Fees

If you accept international payments:

• PayPal: 3-4% above market exchange rate
• Stripe: 1% for currency conversion
• Wise: 0.4-0.7% with no markup on exchange rate
• Square: 1% for currency conversion

3. Payout Speed Fees

To get your money faster:

• Stripe: 1.5% for instant payouts
• PayPal: 1.5% for instant transfers
• Square: 1.5% for instant transfers
• Wise: No instant option, but typically 1-2 business days

Strategic Ways to Minimize Transaction Fees

Beyond choosing the right platform, here are practical strategies to reduce your payment processing costs:

1. Incentivize ACH/Bank Transfers

Bank transfers typically cost 1% versus 2.9%+ for card payments. Consider offering a small discount (1-2%) for customers who pay via bank transfer—you’ll still come out ahead.

2. Negotiate Volume Discounts

Many payment processors offer better rates once you hit certain volume thresholds. Stripe, PayPal, and Square all have enterprise pricing that can save you significant money if you’re processing over $80,000 monthly.

3. Consolidate Currencies

If you operate internationally, consider using a platform like Wise that allows you to hold multiple currencies. This avoids unnecessary conversion fees when paying international vendors or receiving payments from international clients.

4. Implement a Minimum Invoice Amount

Since most processors charge a fixed fee plus percentage, very small transactions are disproportionately expensive to process. Consider establishing minimum invoice amounts or bundling small charges.

5. Review Your Merchant Category Code (MCC)

Your business classification can affect your processing rates. Ensure your business is properly categorized, as some industries qualify for lower interchange rates.

Making the Right Choice for Your Business

The “cheapest” option varies significantly based on your specific business needs:

• For businesses processing few, large invoices: Focus on percentage rates rather than fixed fees. Wise or a custom Stripe integration typically offers the best rates.
• For businesses processing many small invoices: Fixed fees matter more than small percentage differences. Square’s 2.9% + $0.30 is better than Wave’s 2.9% + $0.60 for small transactions.
• For businesses with international clients: Wise offers unbeatable international payment rates, often saving 3-5% compared to traditional options.
• For businesses needing comprehensive features: Consider whether free accounting features (Wave) or extensive integrations (Stripe) provide enough value to offset slightly higher transaction fees.

The Bottom Line: Calculate Your Actual Costs

Don’t just compare advertised rates—calculate your actual costs based on your specific invoice patterns:

1. Determine your average invoice amount
2. Calculate the fee for each platform based on that amount
3. Multiply by your monthly invoice volume
4. Add monthly subscription costs

For example, if your average invoice is $500 and you send 20 invoices monthly:

• Square: ($500 × 2.9% + $0.30) × 20 = $304 monthly in fees
• Wave: ($500 × 2.9% + $0.60) × 20 = $310 monthly in fees
• Wise: ($500 × 2.2% + $0.25) × 20 = $225 monthly in fees

The differences become even more significant as your volume increases.

Final Thoughts

Transaction fees are a necessary cost of doing business, but they shouldn’t be draining your profits unnecessarily. By understanding the true cost structure of different platforms and implementing strategic approaches to payment processing, you can potentially save thousands of dollars annually—money that belongs in your business, not in the pockets of payment processors.

What invoice software are you currently using? Have you calculated how much you’re actually paying in transaction fees? Share your experiences in the comments below.