When accepting cryptocurrency payments online, for one-off transactions or monthly-billed subscriptions, one analytical number that continues to be of significant importance to internet entrepreneurs is minimizing blockchain transaction fees to maximize top-line revenue.

Earlier this year, we reduced payout fees for the following cryptocurrencies:

  • Ethereum – $3.00 to $0.65 (78% reduction in tx fees)
  • Tether USDT – $5.00 to $1.50 (70% reduction in tx fees)
  • USD Coin – $5.00 to $1.80 (64% reduction in tx fees)
  • Tron – $0.25
  • Binance Coin - $0.25

We still believe there’s so much left for us to do. Let’s take a closer look at what transaction fees are, how they’re charged, and what we can do to reduce fees for customers and your business.

Understanding Fees

Blockchain transaction fees, often abbreviated or otherwise referred to simply as ‘tx fees’, are small amounts of the transaction paid out to miners, the entity/tools responsible for validating transactions and adding them to the blockchain. Miners help prevent network abuse in the form of spam and fees paid out also act as an incentive to miners.

Two primary factors influence the transaction fee - the number of transactions (‘tx”) you have received and the current status of the mempool.

The transaction history of your account adds to its complexity, with more transactions typically leading to higher fees. However, the mempool, also known as a holding area for transactions pending confirmation, can have a rather significant impact on fees. When users across the world are sending transactions, this results in the mempool getting crowded. Once the mempool is crowded, miners prioritize transactions with higher fees.

Sellix generates a new wallet for each business and processes crypto payments on its behalf. This means that when payments are looped into one payout pool, businesses receive those funds from unique transactions sent by customers.

For example, if you’re requesting a payout from a single payment recently completed, the blockchain transaction fee shouldn’t exceed a few dollars given the simplicity of the transaction (ex. $15.00). However, if the payout involves on average, ten or more realistically, hundreds of individual transactions, we can expect the transaction fees to be considerably high. This occurs because more transactions create a bigger total transaction, and the blockchain fee is based on the overall size of this transaction.

Even though it’s considerably difficult to lower transaction fees, we’re always on a mission to make them as low as possible for each and every business on Sellix. In our most recent payments update, we’ve launched support to reduce fees by up to 20% – and yet that’s still not enough.

While we continue to design our payments infrastructure to maximize lowering transaction fees, we believe that if businesses on Sellix implement our approach to decreasing fees below, we’d all be one step closer.

Scheduling Payouts

For cash-intensive businesses that require capital to consistently stock digital products, scheduling payouts wouldn’t be the best option for your specific case. However, for the bulk of businesses that aren’t cash-intensive, we strongly recommend scheduling your crypto payouts on a weekly/monthly basis.

For weekly payouts, these payouts will land on the crypto address you set through your Sellix cryptocurrency settings each Sunday at 00:00 UTC.

For monthly payouts, these payouts will land on the crypto address you set through your Sellix cryptocurrency settings on the last day of each calendar month at 00:00 UTC.

While Sellix does not earn interest on any payments for scheduled payouts, we store these cryptocurrencies in the form of assets and not in USD/EURO. This means that Sellix also is not responsible for any market shifts, as you'll receive the payout in the form of its respective cryptocurrency (ex. 0.0025 BTC and not $68.00 USD).

Sometimes crypto payouts may fail. Usually, this is because there is an issue with the wallet address that you have on file. When a payout fails, you will receive an email from Sellix. Until the issue with your wallet, the payment, or its status is resolved, a hold will be placed on all of your scheduled payouts. Should you be able to successfully address all of the concerns outlined in the email, you’ll continue to receive your payouts as scheduled.

To customize your payout schedule, visit the Sellix dashboard: https://dashboard.sellix.io/settings/shop/crypto.

Product Analysis

For businesses selling a one-off $5.00 digital product, and scheduling instant payouts for payments, you'll most likely receive roughly $1.50 - $3.00 due to varying blockchain and platform costs. We strongly recommend businesses review their specific requirements for accepting crypto payments if lowering fees is of significant importance.

An acceptable minimum for selling digital products and accepting crypto payments would be for a product set at $20 - $30. This won't only reduce the impact high blockchain transaction fees may impose, but also encourages customer usage for other payment options.

Gateway Fees

We launched gateway fees earlier this year to combat transaction fees across the blockchain and so far we’ve seen businesses take advantage of this to cover service costs to the Sellix platform, and to lower transaction fees when receiving crypto payouts.

When a customer attempts to checkout with a product price of $24.99 and you add a gateway-specific fee of $0.99 or 5.00% of the transaction total, Sellix will add this as a separate fee available to the customer during checkout. Businesses will receive the full amount minus platform fees.

To enable, edit, or remove gateway fees for your business, visit the Sellix dashboard: https://dashboard.sellix.io/settings/shop/gateway-fees.

What's Next

Blockchain transaction fees are an avoidable byproduct of accepting crypto payments online. However, by getting a better understanding of how they work and how you can potentially reduce the effects they have on your business, then you can focus on what you do best: scaling your business.  

We're always focused on building out the world's easiest way to sell digital products and accept payments online. If you're excited about what we're doing, feel free to join our Discord server and Follow us on Twitter.