Net revenue

Net revenue strips away all the costs and reversals that sit between gross payment volume and the money your business actually keeps. Gross volume can be misleading if fees, refunds, and disputes consume a significant portion. Net revenue shows the true economic value of your payment operations.

The gap between gross and net revenue is driven by three categories of deduction. Processing fees are the cost of accepting payments and vary by payment method, transaction size, and currency. Refunds represent revenue returned to customers and signal product or experience issues. Chargebacks are disputes that reverse revenue and carry additional penalty fees.

Analysing the gross-to-net ratio over time reveals whether your payment economics are improving or deteriorating. A widening gap indicates rising costs or increasing customer dissatisfaction that warrants investigation.

Net Revenue = Gross Payment Volume - Processing Fees - Refunds - Chargebacks

For example, if GPV is 500,000 pounds, fees are 15,000, refunds are 12,000, and chargebacks are 3,000, net revenue is 470,000 pounds. The gross-to-net ratio in this case is 94%, meaning the business retains 94p of every pound processed.

Track each deduction category separately. A rise in net revenue loss could be driven by any combination of fee increases, higher refund rates, or escalating chargeback rates. Without the breakdown, you cannot diagnose the cause.

1. 1

   Negotiate processing fees based on volume

   As GPV grows, renegotiate fee structures with your payment processor. Volume-based pricing tiers and interchange-plus pricing often deliver better economics than flat-rate plans.

2. 2

   Reduce refund rate through better expectation setting

   Accurate product descriptions, clear pricing, and strong onboarding reduce the mismatch between customer expectations and delivered value that drives refund requests.

3. 3

   Prevent chargebacks proactively

   Use clear billing descriptors, accessible self-service cancellation, and chargeback alert services to intercept disputes before they become formal chargebacks with associated fees.

4. 4

   Steer towards lower-cost payment methods

   Bank transfers and certain digital wallets carry lower processing fees than credit cards. Incentivise customers to use lower-cost methods where appropriate without adding checkout friction.