Payment Processing Break-Even Point: $93K Monthly Revenue

Fixed costs $76.0K/mo Monthly fixed base

Contribution margin 81.5% After variable costs

Break-even revenue $93.3K/mo Monthly revenue target

Break-even timing Month 31 First break-even month

Break-even calculator

Use this calculator to test monthly revenue, variable expenses, and fixed costs against break-even for a payment processing business.

Lean Base Full

Monthly revenue Revenue is the cash in that covers direct costs and fixed overhead. $ Low sales High sales Variable expenses These are the costs that rise as payment volume grows. $ Low direct costs High direct costs

Money available to cover fixed costs $30,000 $55,000 revenue - $25,000 variable expenses

Margin ratio

55%

Covers fixed costs

$75,000 short

Fixed monthly costs This is the monthly overhead break-even must cover. $ Low overhead High overhead

Break-even chart Revenue Total costs

Which payment processing expenses are fixed, and which move with sales volume?

Cost classification

Break-even gets reliable only when fixed monthly bills are separated from costs that rise with payment volume. In this model, that matters because break-even is Month 31 and cash bottoms out at $1.103 million below zero in Month 30.

Expense	Cost	Break-Even Treatment	Common Mistake
Office Rent	Fixed	Use $5,000 per month in the break-even base from Month 1 through Month 60.	Spreading rent by transaction count and hiding the true monthly hurdle.
Committed Payroll	Fixed	Include committed roles as fixed overhead; first-year wages equal $62,500 per month before any payroll taxes or benefits not listed.	Treating salaried staff as flexible just because hiring dates can move.
Cloud Infrastructure & Hosting	Fixed	Use $3,000 per month as fixed platform capacity for the relevant planning range.	Assuming hosting drops when payment volume dips in a slow month.
Security & Compliance Software	Fixed	Use $1,500 per month as recurring fixed overhead needed to operate the platform.	Bundling compliance tools with fraud checks and modeling both as one flat line.
Third-Party Payment Gateway Fees	Variable	Apply 7.0% of revenue in the first year, stepping down to 5.0% by the mature year.	Missing gateway leakage and overstating contribution margin per transaction.
Fraud Prevention Software Licenses	Variable	Apply 1.5% of revenue in the first year, declining to 1.1% by the mature year.	Calling fraud prevention fixed when review activity rises with payment volume.
Digital Marketing & Advertising	Variable	Apply 8.0% of revenue in the first year, falling to 6.0% by the mature year in the break-even model.	Mixing acquisition budgets with performance spend and double-counting growth spend.
Merchant Onboarding, Fraud Review, and Chargeback Handling	Semi-variable	Model a base operating load, then add capacity as sellers, transactions, fraud checks, and disputes rise.	Treating support load, chargebacks, and compliance work as one flat expense.

How does break-even change from lean to base to full scale in payment processing?

Scenario table

Lean has the lowest fixed load, so it needs the smallest revenue base. Base adds acquisition spend, and full adds scaled staff and marketing, so the break-even line rises fast unless merchant volume and fee mix improve.

Planning assumptions only; actual break-even will move with signed merchant volume, fee mix, disputes, and reserve policy.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch	$93,252	$17,252	$76,000	81.5%	$0	Needs about $32M in monthly card volume, so fee slippage can flip it red.
Base launch	$128,834	$23,834	$105,000	81.5%	$0	Needs about $45M in monthly card volume; acquisition spend lifts the hurdle.
Full scale	$219,308	$35,308	$184,000	83.9%	$0	Needs about $78M in monthly card volume, so scale only works with signed merchants.

What breaks the break-even plan if volume slows or costs rise?

Stress test

The model reaches break-even around $93,000, but it has little room for slower merchant activation, weaker take rate, or higher fraud and support costs. Cash already bottoms near Month 30 at -$1.103 million, so any delay can widen losses fast.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$93,000	$0 gap	Break-even lands in Month 31.
Revenue shortfall	Monthly revenue only reaches the $129,000 acquisition-funded target.	$129,000	$29,000 gap	Slower merchant activation leaves less monthly contribution.
Fixed-cost pressure	Monthly fixed commitment rises from about $105,000 to $184,000.	$219,000	$126,000 gap	Headcount and overhead push break-even much higher.
Margin pressure	Variable expense load stays at 18.5% instead of easing to 13.7%.	$129,000	$36,000 gap	Weak take rate and higher fraud checks eat margin.
Combined pressure	Year 5 fixed and acquisition spend reaches about $277,000, with variable expenses at 18.5%.	$340,000	$247,000 gap	Slow activation plus higher costs strain cash near Month 30.

What should a payment processing founder verify before signing long-term contracts and scaling merchant onboarding?

Founder checklist

Don’t lock in long contracts or hiring until the processor flow, risk rules, and acquisition math work together. In this model, keep fixed commitments light until monthly revenue can carry about $76,000 of core overhead and cash lasts through Month 30.

1Settlement FlowGo-live ready

Confirm processor approval and end-to-end settlement before the first merchant signs, because cash timing drives whether the model can fund operations on schedule.

2UnderwritingPolicy set

Document merchant risk review, approval rules, and ownership so onboarding stays fast without letting weak accounts drag down break-even.

3Risk ControlsPCI mapped

Map PCI DSS, fraud controls, chargeback intake, evidence deadlines, reserve policy, and escalation ownership before volume starts, or margin will leak fast.

4Seller Pipeline$250K

Verify the seller funnel can support Year 1 seller CAC of $500 against a $250,000 marketing budget before you add sales capacity.

5Buyer Plan$100K

Check that buyer acquisition holds near $10 CAC within a $100,000 Year 1 marketing budget, and keep fixed commitments off until monthly revenue can cover $76,000 of core overhead.

6Runway CheckMonth 30

Keep cash runway through the Month 30 minimum cash point and avoid hiring support and sales faster than merchant processing volume can justify.