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Understanding Meta’s New Processing Fees for Sellers on Facebook and Instagram Shops

In a move to streamline its e-commerce ecosystem, Meta (formerly known as Facebook) recently announced changes to its processing fees for sales made through Facebook and Instagram Shops. These changes will have varying implications for sellers based on their onboarding method and the payment methods they utilize. In this blog post, we’ll delve into the details of these changes and how they will affect different types of sellers.

Meta’s Processing Fee Changes

Starting from July 1st, Meta will introduce processing fees for sales made using payment methods provided within its platform. The aim of these changes is to provide a consistent and transparent fee structure for sellers across Facebook and Instagram Shops. However, there are important distinctions based on the type of seller and their onboarding process.

1. Sellers Onboarded via Shopify

For merchants using Shopify to power their online stores, Meta has chosen to align its fee structure. This means that Meta will not charge any additional processing fees beyond the transaction fees that Shopify already charges for online sales. Here are the key points to note:

• If you’re a Shopify merchant, orders made through Meta are processed using Shopify Payments.
• If you use Shopify Payments for your online store, you’ll be charged the same transaction fee amount as your regular online store by Shopify directly.
• If you use Shop Pay with third-party gateways via Shopify, the new Meta processing fee will not affect your existing website processor or web order fees.

2. Sellers Onboarded via Commerce Manager

For sellers who have been onboarded to Shops via Commerce Manager, there are specific processing fee rates that apply to different payment methods. Here’s a breakdown of these rates:

• Card Transactions: A processing fee of 2.9% of the total transaction value will be charged by Shopify directly. For instance, if the total transaction cost is $10.00 USD, the processing fee deduction will amount to $0.29, leaving you with a payout of $9.71 USD.
• PayPal Branded Checkout: A processing fee of 3.49% of the total transaction value will be charged by Shopify directly.
• Shop Pay: A processing fee of 2.9% of the total transaction value will be charged by Shopify directly.

Additional Details

It’s important to note the following aspects of Meta’s processing fee changes:

• The processing fee is calculated based on the total transaction amount, including taxes, surcharges, shipping fees, and any state-mandated charges.
• The processing fee encompasses the cost of payment processing.
• This fee applies to all checkout transactions across various product categories on Facebook and Instagram Shops.
• The processing fee is subject to applicable taxes and fees.

Chargebacks

Chargebacks, a common occurrence in e-commerce, have also been addressed in the context of Meta’s processing fee changes. Depending on the method of onboarding, the responsibility for managing chargebacks varies:

• For sellers onboarded through the Facebook and Instagram app on Shopify, Shopify will handle chargebacks directly.
• For sellers onboarded via Commerce Manager, specific guidance on chargebacks is available in Meta’s resources.

Conclusion

Meta’s introduction of processing fees for sales made through Facebook and Instagram Shops signifies a move toward uniformity and transparency in its e-commerce ecosystem. While the fee changes might have differing implications for different types of sellers, it’s clear that Meta aims to ensure consistency and fairness in its fee structure. Sellers are advised to review these changes and understand how they might impact their business operations.

If you’re a seller on Meta’s platform, it’s crucial to familiarize yourself with these processing fee changes and ensure that you’re making informed decisions for your business. Remember, staying up-to-date with platform changes is an integral part of navigating the ever-evolving world of e-commerce.