Stax Payments launched in 2014 as a software company. Today, Stax is a PayFac, to untangle all that jargon, Stax essentially provides payment processing tech. But between you and me, the Stax folks may also have god-like aspirations to achieve acquirer status.
Stax has raised over $245 million from venture capital powerhouses like Greater Sum Ventures, Blue Star Innovation Partners, HarbourVest Partners and PSG. Stax reached a $1 billion valuation—what investors call “unicorn” status—in 2022. The company employs more than 300 extraordinarily talented payment pros from all facets of the industry. Stax has also been on the acquisition warpath, buying tools and tech including:
- BlockChyp in 2024
- Atlantic-Pacific Processing Systems in 2023
- CardX and Fusebill in 2021
As a serial entrepreneur myself, it’s impressive to see a company rise to power like this since 2014! Okay, enough fluff. Let’s talk dirty money.
Formerly known as Fattmerchant, Stax rebranded in 2021—perhaps hoping to shed some weight from its name and add credibility to the “One Flat Price” tagline. This is a bold claim: a monthly, fee-based subscription model for payment processing with no markup. Sounds magical, right? Like a unicorn sipping a latte on Wall Street.
But after peeling back the glossy marketing layers and diving into real-world economics, it seems this unicorn might be just a horse with a party hat.
0%-Markup Processing! Genius Idea or Empty Promise?
First off, let me tip my hat to the Stax concept. A flat fee, 0%-markup credit card processing subscription? It’s genius, revolutionary even. In payments, this level of simplicity would be the holy grail. In truth, I wanted it to work.
But as any seasoned payments nerd will tell you—and trust me, I’m that guy—the devil is in the details. And those details reveal a tale of fluctuating costs, hidden fees, and a marketing pitch that sounds far better than it performs.
Wordplay vs. Real-World Economics
Stax advertises a monthly subscription fee of $99 for up to $150,000 in annual volume. Already we’ve hit the first point of confusion: The monthly fee equates to a yearly volume limit. What this really means is you pay $99 monthly for $12,500 in monthly volume. That equates to about 0.79% in fees if you use every penny of the allotted $12,500 volume. And that sounds pretty good, right?
Well, the real gotcha hides in the fine print. Stax pitches 0% markup—which does not mean “no markup”. It’s clever wordplay, great marketing and ultimately misleading. Here’s how it really works. With a Stax subscription, you pay $99 monthly on top of interchange expenses and other fees. And from what I’ve read in customer reviews, those other fees can pile up. Your bill might include batch fees, PCI compliance, chargebacks, and a premium support fee (because nothing says “great customer service” like an unexpected charge).
As they say on Saturday morning TV commercials: But wait, there’s more! Many businesses don’t generate the same revenue every month. Sales fluctuate. And when you hop between Stax’s volume tiers, the flat fee morphs into a percentage that can make your accountant cry.
Stax Tiered Pricing: Let’s Break It Down
Here’s a handy table that lays out the Stax pricing tiers in cold, hard data.
| Tier | Fee/Month | Volume/Year | Volume/Month | Monthly Fee as % of Revenue |
| Tier 1 | $99 | Up to $150,000 | Up to $12,500 | 0.79% (at $150K) Up to 1.98% (lower volumes) |
| Tier 2 | $139 | $150K–$250K | $12.5K–$20.8K | 1.11%–0.67% |
| Tier 3 | $199 | $250K+ | $20.8K+ | 0.96%+ (decreases with higher volume) |
Why This Matters
At first glance, a markup of 0.67% to 1.98% seems like a steal. But remember, these rates apply on top of:
- Interchange fees range from 0.05% to 3.15%.
- Interchange-related transaction fees of $0.05 to $0.75
- Other card brand assessments.
Add the natural ebb and flow of monthly sales, and your steady “flat fee” easily becomes a roller coaster—one that could send your processing costs north of 6%.
There are lots of variables here, and I could make this look worse if I want to with different use cases. But even the best-case scenario with Stax is nowhere near comparable to market pricing. I would rather choose Square, and that’s not saying much. At least with Square, your percentage is flat, and you have no monthly fees.
The Stax pricing model only nears competitive pricing relative to real, traditional processors when you process around $199,000 monthly. And from what I’ve seen from their customers, there is a tier for even some of the highest volume companies with high subscription fees. Even then, it’s like trying to find the perfect avocado—possible, but highly dependent on timing and luck.
Let Stax Customers Do the Talking
You don’t have to take my word on Stax. Having spent time in the reputation management world, I know the best way to understand a company: Listen to the customers. Like any savvy review sleuth, I go straight to the negative reviews first. Because, let’s be honest—that’s where the real dirt lives. We all do this, right? If you’ve ever shopped on Amazon, you’ve clicked ‘1-star reviews’ faster than the add to cart button.
To get to the heart of what customers are saying about Stax, we unleashed a review-scraping tool to compile feedback from Google, TrustPilot and Capterra. ChatGPT summarizes the negative sentiment this way:
- Unexpected fees
- Frustrating customer service
- Accounts that are harder to cancel than a gym membership in January
This sounds more like an unexpected fee surprise party than a flat-fee utopia.
Again, I could spin this in different ways. And to be clear, there are many positive reviews alongside the angry complaints. You can decide which side is more compelling by perusing all Stax reviews for yourself.
As you browse those reviews, you may notice something unusual about the Google reviews in particular. I sure did. There are over 260 five-star ratings for Stax on Google that have no written review. Ratings without reviews are not uncommon, but these show an interesting pattern. The wordless five-star ratings appear around the same date. I’ll let you make your own conclusions about how that might happen.
Stax Connect: A Big Red Flag
Moving on to the broader Stax business strategy, let’s talk about Stax Connect. Stax Connect is a seamless embedded payments tool that lets software companies add a payment flow directly into their applications.
There are efficiency advantages to embedded payments, but they also add another layer of profit to card processing. Because what’s better than one company profiting from your hard-earned money? Maybe two, three or four? Exactly how many hands should be reaching into your revenue stream?
A big disclaimer here, I’m not anti-embedded payments, but I did just write a big article on the topic about how we need to be careful.
Higher Costs
Here’s a rundown of the problems with embedded payments. First, they raise costs. Software providers love adding payment functionality because they can take a percentage or a flat fee from every transaction. They may also have technology partners behind the scenes—maybe Stax Connect—and these partners will also want a piece of your revenue.
Lack of Choice
Second, embedded payments agreements chip away at free-market choice like a raccoon at a garbage bin—persistent, sneaky and leaving a mess behind. This happens when providers lock software companies into exclusive agreements. So if you want to offer your customers embedded payments, you won’t get to choose your payment provider or negotiate rates. The result? It’s a multi-tiered fee parade: Interchange, acquirers, independent sales organizations, independent software vendors and software companies all have their hands out each time you make a sale.
Longer term, these exclusive arrangements limit competition, and ultimately allow providers to dial up fees and dial down customer service—and there’s usually not much you can do about it.
Worse, your business can become fully entrenched with a software application before you realize how much revenue you’re losing to processing fees. In time, the cost of switching to another application can feel like breaking up with someone who still has your Netflix password. It’s messy and complicated. You might face costs associated with operational disruptions, staff retention, data migration and more. Despite the fee burden, it may not be worth the headache to end that pricey payment relationship.
So, when I see embedded payments marketed on the Stax homepage, it sends up a red flag. Stax Connect is marketed on convenience, but there are serious negative consequences to merchants and the broader industry.
Limited Billing Transparency
Now let’s touch on transparency—or rather, the lack thereof. Embedded payment solutions can empower software companies to become masters of the “just trust us” billing model. You will commonly see processing costs billed as a vague flat rate, with hidden costs tucked away like socks behind the dryer. Forget about applying advanced cost-reduction strategies like interchange optimization and debit routing. If you don’t know where the fees are hiding, those strategies are off the table.
While embedded payments may seem like the cool kid at a Mark Zuckerberg free speech rally in the metaverse, tools like Stax Connect come with a price tag far higher than advertised. So, business owners, stay sharp. Demand transparency, fight for flexibility and remember: You should be choosing your payment processor, not the other way around.
My Two Cents (Plus Interchange) on Stax
Stax had a brilliant idea. But the gap between the pitch and reality is insurmountable. It’s like paying for an all-you-can-eat buffet and discovering the food cost extra, the dessert is off-limits, and you’re charged for a chair. If you ask me, flat-fee payment processing is a fantasy that collapses under the weight of real-world economics.
The next time someone pitches you one flat price, ask what flat means, exactly. Because in the payments world, nothing is ever as simple as it seems.
At VeriFee, we help small and mid-sized merchants negotiate better payment terms without switching processors. If you’re processing $100,000 monthly and want to see how you can save on processing fees, contact us to get started.
