TCO comparison formula: TCO = (transaction_fee_rate × monthly_volume) + (integration_hours × developer_hourly_rate) + (maintenance_hours/month × developer_hourly_rate × 12) + estimated_annual_losses. For most African startups under NGN 50M/month, engineering time is the dominant cost factor. A gateway with poor documentation that takes 3 extra weeks to integrate costs more than 0.5% lower fees will save in the first year. At scale (NGN 500M+/month), the fee rate dominates and engineering cost becomes a smaller proportion.
| Cost Component | NGN 10M/month | NGN 100M/month | NGN 1B/month |
|---|---|---|---|
| Transaction fee (1.5% cap NGN 2K) | ~NGN 195,000 | ~NGN 1,950,000 | ~NGN 19,500,000 |
| Integration (one-time, 3 weeks) | ~NGN 187,500/yr amortized | ~NGN 18,750/yr | ~NGN 1,875/yr |
| Maintenance (6 hrs/mo × NGN 3,000/hr) | NGN 216,000/yr | NGN 216,000/yr | NGN 216,000/yr |
| Chargeback losses (0.2% of vol) | NGN 20,000/mo | NGN 200,000/mo | NGN 2,000,000/mo |
| Total monthly cost | ~NGN 450,000 (4.5%) | ~NGN 2,350,000 (2.35%) | ~NGN 21,700,000 (2.17%) |
| Dominant cost factor | Engineering time | Transaction fees + engineering | Transaction fees |
The crossover point: above NGN 100M/month, a 0.3% fee difference saves NGN 300,000/month — enough to justify the engineering time to switch gateways. Below NGN 50M/month, documentation quality and support responsiveness have more financial impact than the headline fee.
See cost modelling a payment integration beyond transaction fees for the full cost component breakdown.
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