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Understanding transaction fees is essential for managing payment costs. This guide explains the different types of fees, how they’re calculated, and how to optimize costs.

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Fee Types

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Transaction Fees

Fees charged per transaction:
  • Fixed Fee - Fixed amount per transaction (e.g., $0.50)
  • Percentage Fee - Percentage of transaction amount (e.g., 1%)
  • Tiered Fee - Fee varies by amount tier
  • Hybrid Fee - Combination of fixed and percentage
TODO: Add diagram showing different fee types Transaction Fee Types Diagram

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Route Fees

Additional fees for specific payment routes:
  • Route-Specific - Fees vary by payment route
  • Speed-Based - Faster routes may have higher fees
  • Coverage-Based - Some routes have additional fees

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Conversion Fees

Fees for currency conversion:
  • Conversion Fee - Fee for converting between currencies
  • Spread - Margin added to exchange rate
  • Combined - May include both fixed and percentage components
TODO: Add diagram showing conversion fee components Conversion Fee Breakdown Diagram

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Fee Structure

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Fee Calculation

TODO: Add diagram showing fee calculation flow Fee Calculation Flow Diagram Example Calculation: 
Payment Amount: 1,000 NGN
Transaction Fee: 1% = 10 NGN
Route Fee: 5 NGN
Conversion Fee: 0 (same currency)

Total Fees: 10 + 5 = 15 NGN
Total Deduction: 1,000 + 15 = 1,015 NGN
With Currency Conversion: 
Source Amount: 100 USD
Destination: 150,000 NGN (at 1,500 NGN/USD)
Transaction Fee: 1% = 1 USD
Conversion Fee: 0.1% = 0.1 USD
Route Fee: 0.5 USD

Total Fees: 1 + 0.1 + 0.5 = 1.6 USD
Total Deduction: 100 + 1.6 = 101.6 USD

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Fee Transparency

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Fee Disclosure

All fees are disclosed in payment quotes: 
{
  "amount": 1000,
  "currency": "NGN",
  "fees": {
    "transaction_fee": 10,
    "route_fee": 5,
    "conversion_fee": 0,
    "total_fees": 15
  },
  "total_amount": 1015,
  "fee_breakdown": {
    "transaction_fee": {
      "type": "percentage",
      "rate": 0.01,
      "amount": 10
    },
    "route_fee": {
      "type": "fixed",
      "amount": 5
    }
  }
}
TODO: Add diagram showing fee breakdown in payment quote Fee Breakdown Diagram

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Fee Information Sources

Fees are available in:
  • Payment Quotes - Complete fee breakdown
  • API Responses - Fee details in responses
  • Dashboard - Fee information in transaction history
  • Transaction Records - Fees recorded in all transactions

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Fee Factors

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Factors Affecting Fees

Payment Amount
  • Larger amounts may have different fee structures
  • Some fees are percentage-based
  • Minimum fees may apply
Payment Route
  • Different routes have different fees
  • Faster routes may cost more
  • Route-specific fees apply
Currency Conversion
  • Conversion adds conversion fees
  • Spread may vary by currency pair
  • Conversion fees are separate from transaction fees
Payment Type
  • Different payment types may have different fees
  • Local vs cross-border fees differ
  • Route selection affects fees
TODO: Add diagram showing factors affecting fees Fee Factors Diagram

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Fee Optimization

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Cost Optimization Strategies

Strategy 1: Route Optimization Choose cost-effective routes:
  • Compare route fees
  • Use cheaper routes when speed isn’t critical
  • Optimize route selection for cost
Strategy 2: Bulk Payments Process payments in bulk:
  • May qualify for volume discounts
  • Reduce per-transaction overhead
  • Optimize route usage
Strategy 3: Currency Management Optimize currency conversions:
  • Minimize conversions when possible
  • Time conversions for favorable rates
  • Use direct currency pairs when available
Strategy 4: Payment Timing Time payments strategically:
  • Avoid peak-time fees if applicable
  • Process during cost-effective periods
  • Batch payments for efficiency
TODO: Add diagram showing fee optimization strategies Fee Optimization Strategies Diagram

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Fee Estimation

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Estimate Fees Before Payment

Use payment quotes to estimate fees: 
// Get fee estimate
const quote = await poolerClient.post('/payments/initiate', {
  amount: 1000,
  currency: 'NGN',
  recipient_id: recipientId
});

const fees = quote.data.data.fees;
console.log('Estimated Fees:', fees.total_fees);
console.log('Total Amount:', quote.data.data.total_amount);

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Fee Calculator

Calculate fees for planning:
  • Use API to get quotes for different amounts
  • Compare fees across different scenarios
  • Plan payment costs in advance

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Fee Models

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Model 1: Pay-as-You-Go

Pay fees per transaction:
  • Pros: No upfront costs, pay only for usage
  • Cons: Fees per transaction, may be higher for high volume
  • Best For: Low to medium volume, variable usage

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Model 2: Volume-Based

Fees reduce with volume:
  • Pros: Lower fees at higher volumes, cost savings
  • Cons: May require minimum volumes
  • Best For: High volume, consistent usage

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Model 3: Subscription

Monthly fee with reduced transaction fees:
  • Pros: Predictable costs, lower per-transaction fees
  • Cons: Fixed monthly cost, may not be cost-effective for low volume
  • Best For: Consistent high volume, predictable usage
TODO: Add diagram comparing fee models Fee Models Comparison Diagram

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Fee Tracking

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Track Fees Over Time

Monitor fee trends:
  • Total Fees - Track total fees paid
  • Average Fee - Calculate average fee per transaction
  • Fee Trends - Identify fee trends over time
  • Cost Analysis - Analyze costs by route, currency, etc.

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Fee Reporting

Generate fee reports:
  • Transaction Reports - Fees per transaction
  • Periodic Reports - Fees by period (daily, weekly, monthly)
  • Category Reports - Fees by category (route, currency, etc.)
  • Comparison Reports - Compare fees across periods
TODO: Add diagram showing fee tracking and reporting Fee Tracking and Reporting Diagram

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Fee Reconciliation

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Reconcile Fees

Reconcile fees with transactions:
1

Collect Fee Data

Gather fee data from:
  • Payment quotes
  • Transaction records
  • API responses
2

Calculate Expected Fees

Calculate expected fees based on:
  • Payment amounts
  • Fee structures
  • Routes used
3

Compare with Actual

Compare expected fees with actual fees charged.
4

Investigate Discrepancies

Investigate any discrepancies:
  • Verify fee calculations
  • Check for fee changes
  • Contact support if needed

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Best Practices

Review Fee Quotes - Always review fee breakdowns in payment quotes before confirming.
Understand Fee Structure - Understand how fees are calculated for your use case.
Optimize Routes - Choose cost-effective routes when speed isn’t critical.
Track Fees - Monitor fees over time to identify optimization opportunities.
Contact Support - Reach out for fee optimization for high-volume scenarios.

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Next Steps