How Does Payhip Make Money?

Payhip is an ecommerce platform that caters to selling digital products from small- and medium-sized creators

Katie Miller is a consumer financial services expert. She worked for almost two decades as an executive, leading multi-billion dollar mortgage, credit card, and savings portfolios with operations worldwide and a unique focus on the consumer. Her mortgage expertise was honed post-2008 crisis as she implemented the significant changes resulting from Dodd-Frank required regulations.

Payhip is an ecommerce platform specifically targeted at digital content creators. It enables users to sell digital downloads, online courses, coaching, memberships, and physical products. It makes money from subscription fees and transaction fees, which vary by plan.

Launched in 2011 and based in London, Payhip is an ecommerce platform that specializes in digital services like downloads, online courses, memberships, and coaching. It also enables online ordering for physical products, with the ability to sell and manage inventory, fulfill orders, run promotions, collect reviews, and more. Payhip features a customizable store website builder, and users can connect their own custom domains or embed a checkout on their existing websites.

Compared to other ecommerce platforms like Shopify, eBay, and even Etsy, Payhip’s target audience is digital creators. Their “About Us” page states, “We help creators earn a living online doing what they love,” and their “Mission” section opens with, “Whether you’re an author, designer, YouTuber, blogger, poet, knitter, painter, musician, podcaster, consultant, teacher….” As of mid-2023, their website advertises a user base of “over 130,000 creators.”

From a business perspective, Payhip makes a profit by charging for monthly plan subscriptions as well as transaction fees, which differ across their three plan types.

From a user perspective, Payhip facilitates the direct online sale of both digital and physical products. Sellers can create customized storefronts without needing any technical or coding knowledge, and can take advantage of email marketing tools, tax reporting, and features like coupons, reviews, referrals, and more. Sellers receive a payment from Payhip after each sale.

Payhip has a slightly different user flow for each type of product sold through the platform. Each sale starts with a customer visiting a digital product page and completing a purchase. After that, the customer journey changes depending on the product, as outlined below.

After purchasing a digital download, customers are sent to a download page where they can access their files and receive an email receipt with a link to access their download in the future.

When a customer purchases a physical product through Payhip, they see an order confirmation and are emailed a receipt. The Payhip seller then receives the payment and is prompted to ship the order. The seller then sends out the order and can mark it as “shipped” in Payhip and send an email with a tracking number to the customer.

For these types of services, customers set up a password and create an account at the time of their purchase. From there, they’re directed to a subscription page or dashboard where they can manage their personal information or online materials as applicable. Customers are also emailed a link to these pages in their receipts.

Payhip describes itself as an “all-in-one ecommerce solution for creators” and has a range of features targeted at digital creators. All their plans include access to all of their features, which include a wide range of capabilities for different use cases.

Payhip enables the sale of:

Payhip’s features include:

Payhip offers a free plan; however, under this plan type, each sale is subject to a 5% transaction fee. In addition, sellers must link a PayPal or Stripe account (or both) to Payhip to receive payments, and PayPal and Stripe both charge transaction fees. These fees are each estimated at around 2.99% plus a fixed fee per transaction, with an additional 1.50% fee for international transactions.

In addition to the free plan (called the Free Forever plan), Payhip offers a Plus plan ($29 per month with a 2% transaction fee per sale) and a Pro plan ($99 per month with no transaction fee for sales). All of the plans include all of Payhip’s features, with the only difference being the pricing structure.

Notably, if sellers choose to refund a payment to their customers, none of the fees that Payhip, PayPal, or Stripe charge are refunded to the seller. Also, sellers cannot currently choose to receive their money in different installments to save on PayPal and Stripe fees.

Users who choose to sell courses and host videos with Payhip must also pay a fixed price of $5 per month for this additional hosting service.

The percentage that Payhip charges as commission varies by plan. Payhip charges a 5% transaction fee for every sale under their free plan, a 2% transaction fee under their $29-per-month plan, and no transaction fees under their $99-per-month plan.

You do not have to pay a monthly fee to use Payhip, as they offer a free plan that includes all of their features. However, the free plan does include a 5% fee that is charged as a commission for every transaction. Their $29-per-month Plus plan includes a 2% transaction fee, while their $99-per-month Pro plan does not charge any transaction fees.

Although Payhip offers a free plan, it charges a 5% transaction fee for every sale under this plan type.

To receive payments via Payhip, sellers must either link a PayPal account or a Stripe account—and sellers have the option to use both if desired.

When you sell something on your Payhip store, Payhip will instantly transfer money to your PayPal or Stripe account, less the applicable fees from Payhip (which vary depending on your plan type), PayPal, and Stripe. You will receive a transfer after every transaction as it happens.

Payhip is an ecommerce platform targeted at creators who want to sell online content, with the option to sell physical merchandise as well. Its many features address various digital applications involved in selling content, such as digital downloads, courses, coaching, and memberships.

The platform is designed to be easy enough to use that sellers do not require any technical knowledge to set up a shop, but customizable enough that it can integrate into existing brands, businesses, platforms, and marketing strategies. Please note that users can only sell original material, not private-label rights.

Sellers looking to use Payhip will need a PayPal or Stripe account to receive payments. In comparing Payhip with other platforms, it is worth noting their specialty in digital content delivery as opposed to physical shipping logistics, as well as comparing the transaction fees against those charged by other ecommerce companies. It is also important to consider sales volume against Payhip’s plan subscription types and the associated payment processing fees charged by Payhip, PayPal, and Stripe.

Payhip. “Pricing Page.”

Payhip. “About Us.”

Payhip. “Sell Digital Downloads & Courses Page.”

Payhip. “Email Marketing Page.”

PayPal. “PayPal Merchant Fees.”

Payhip Help Center. “How Payhip Works.”

Payhip. “Sell Digital Downloads Page.”

Payhip. “Sell Courses Page.”

Payhip. “Sell Coaching Page.”

Payhip. “Sell Memberships Page.”

Payhip. “Sell Physical Products.”

Payhip. “Online Store Builder.”

Payhip. “Marketing Tools Page.”

Payhip. “Payment Gateways Page.”

Payhip. “Sales Tax Page.”