How transaction costs are quietly eroding your EV charging profitability

Profitability has emerged as the defining focus for EV charging businesses. As the emphasis shifts to operations, most CPOs prioritize obvious revenue levers such as optimizing pricing strategies, driving higher utilization, or differentiating their services. At the same time, a critical cost component silently erodes their margins. 

Transaction costs, often hidden in complex CPMS pricing structures, can represent hundreds of thousands in annual expenses, and they scale directly with your success. Unlike other expenses, transaction costs compound directly with utilization, creating a counterintuitive penalty for operational success.

Understanding the complete CPO cost structure

The full spectrum of CPO expenses includes several critical components, extending beyond the obvious hardware and electricity costs that must be carefully managed:

While most categories are straightforward, CPMS provider costs are particularly complex and are often the least understood by CPOs.

Breaking down the CPMS pricing/fee structure 

CPMS cost structures can be confusing because different CPMS providers use varying cost components, making it challenging for CPOs to calculate the total cost of ownership. The most common components include:

• One-off costs, which include initial onboarding fees, setup charges for roaming connections, and any third-party integration expenses required to launch your platform
• Recurring costs, which consist of standard platform subscription fees and per-connector charges that scale with your network size, along with various transaction-related fees

Recurring costs

Recurring CPMS costs fall into 3 main categories and each has a different share.

Fixed monthly costs: These are standard monthly subscription costs that remain relatively fixed as you scale. They are transparent and predictable, typically based on system usage rather than the number of drivers or chargers connected to your network.

Monthly variable costs: Per-connector or per-location fees that scale with your network size but remain predictable. You can forecast these costs as you plan expansion.

Transaction Costs: Fees related to transaction fees or markups for direct payment or roaming transactions. This can include session fees, roaming transaction fees/markups, and processing markups. It’s often presented as a fee per kWh or a percentage of the revenue that you either pay directly or add as a markup on top of the total amount.

Understanding the two types of transaction costs that impact your bottom line:

Transaction costs can be split into two distinct components, both of which scale directly with your operational success:

1. Direct Payment Service Provider (PSP) Transaction Costs

When EV drivers pay directly via credit card (through your app or payment terminal), these payments are processed by Payment Service Providers (PSP), and the PSP takes a percentage of each transaction. If CPOs don’t have direct contracts with PSPs, they have no control over terms, and CPMS providers can (and often do) add their own markups on top of base processing fees.

Rather than passing through payment processor fees at cost, they layer additional markups. This creates a two-part fee structure: base payment processor fees plus the CPMS provider’s margin, often without clear visibility into how much of each transaction fee goes where.

2. Roaming Transaction Costs

When drivers charge through roaming networks (using different charging apps or RFID cards), CPMS providers typically charge either:

• A percentage of the total transaction revenue
• A fixed fee per kWh delivered
• A markup added to what they pay the EMSP (e-Mobility Service Provider)

The critical insight: Both transaction types scale directly with your success. The more customers you serve and the more energy you deliver, the higher these costs become. These costs add up quickly, often representing hundreds of thousands in annual expenses that many CPOs don’t fully account for during initial business planning.

The real financial impact

In the beginning, transaction costs appear as small percentages that seem manageable, especially in comparison to major capital expenses such as hardware, installation, and energy costs. But unlike every other cost category in EV charging, transaction costs scale linearly with your success. To understand the full impact, consider this realistic scenario based on actual CPO operations:

Consider a mid-sized CPO with 1,500 double socket AC charging stations. At first glance, a 4% transaction fee or a €0.02/kWh fee might seem insignificant. However, when calculated across the entire network, the numbers tell a different story.

For this CPO, each charging station might generate around €425 in monthly revenue. With a 4% transaction fee, that represents €17 per station per month in transaction costs alone. Multiply by 1,500 stations, and the monthly cost reaches €24,624 – over €295,000 annually just in transaction fees.

Alternatively, with a €0.02 per kWh fee structure, the monthly cost rises to €21 per station, totaling €30,780 per month or nearly €370,000 per year. These costs directly impact your gross margin, reducing profitability even before considering other operational expenses.

Transaction costs stack on top of your existing fixed and variable expenses, creating a compounding burden. While everyone wants higher utilization rates, transaction fees grow almost in lockstep with success, although there are some economies of scale in most cases.

So, what starts as manageable costs for smaller networks can quickly become a dominant expense category as your network scales and utilization improves. 

Understanding this complete picture is crucial:

“A 2-3% difference in transaction costs might seem small, but it compounds ruthlessly with scale and success. The difference between a sustainable business model and one requiring continuous capital infusions often comes down to these seemingly minor percentage points.”

Johan van Kooten, Strategic Business Development Director Europe, AMPECO

The compounding effect 

Beyond the base financial impact, transaction costs can become a bigger problem because of several factors that make them grow even faster:

High-power charging amplifies the impact.
A 50 kW DC charger delivers several times more energy per session than AC charging, meaning transaction costs scale proportionally higher. Networks adding fast charging can discover that their transaction costs are growing faster than their revenue. 

Network growth doubles costs without efficiency gains.
Doubling your network doubles transaction costs and unlike fixed platform costs that become more efficient with scale, transaction costs typically lack volume discounts.

Success in utilization directly increases your largest cost category.
This creates the most counterintuitive problem: as CPOs succeed in driving higher utilization, the very metric most critical for profitability, transaction costs grow linearly with that success.

Volume discount reality for direct payments.
While payment processors offer volume discounts to CPMS providers, these savings aren’t always passed through to CPOs, who may face flat percentage fees regardless of transaction volume.

AMPECO’s transparent approach to transaction costs

Understanding these dynamics reveals why AMPECO approaches transaction costs differently than most CPMS providers. At AMPECO, we focus on three key principles:

Strategic partnerships for better base rates

Rather than adding markups, AMPECO leverages pre-negotiated partnerships with payment service providers to bring better base transaction fees even to smaller CPOs. Through volume agreements, we secure discounts that individual operators couldn’t achieve independently, and we pass these savings directly through to our customers.

Complete transparency

AMPECO provides CPOs with full visibility into earnings and costs through detailed reporting that clearly shows where money goes. Our platform breaks down exactly what portion goes to payment processors versus other operational costs, eliminating the opacity that allows hidden markups to persist.

You can clearly see the breakdown of base payment processor fees, energy costs, roaming partner fees, platform costs, and your actual net revenue.

Preventive tools that reduce associated costs

Beyond transparent pricing, AMPECO includes tools designed to minimize transaction-related expenses:

• Preauthorization systems prevent session disputes with roaming partners that create costly chargebacks and administrative overhead.
• Fraud detection algorithms identify and prevent fraudulent transactions before they impact your bottom line.
• Complete transaction oversight provides real-time visibility into all charging sessions and transaction statuses, as well as the ability to manually bill sessions after the transaction has been suspended or interrupted for any reason.

Building a Total Cost of Ownership model

Given the complexity of CPMS pricing structures and the significant impact of transaction costs on long-term profitability, it’s essential to build a total cost of ownership (TCO) model that accounts for all fee components:

1. Direct monthly fees: Fixed platform costs
2. Per-connector charges: Variable costs based on network size
3. Transaction fees: Costs that scale with utilization

The TCO model should factor in how your network will evolve over time, as transaction costs typically grow faster than other expense categories as your business scales.

Strategic questions every CPO should ask

Whether you’re choosing a new CPMS provider or auditing your existing costs, these questions will help you cut through pricing complexity and focus on what truly impacts your bottom line:

Cost transparency:

• Can you see exactly where each percentage point of transaction fees goes?
• Are payment processor fees passed through at cost or marked up?
• How do transaction costs change as your network grows?

Fee structure analysis:

• What’s the total cost per transaction across different charging speeds?
• How do roaming fees compare to direct customer transactions?
• Are there volume thresholds that reduce transaction costs?

Operational impact:

• How do transaction costs affect your pricing strategy?
• What’s the true margin impact of driving higher utilization?
• How do transaction costs influence your expansion planning?

The bottom line

While CPOs obsess over revenue optimization, transaction costs often determine who thrives and who burns through capital. Unlike other expenses that become more efficient with scale, transaction costs in most CPMS models grow directly with your success, penalizing operational excellence when you need profit most.

The solution isn’t to avoid growth or limit utilization. It’s important to understand your complete CPMS cost structure and to choose vendors who align their business model with your success rather than penalize it. In a capital-intensive industry where margins matter, these “small” percentage differences determine whether you build a profitable EV charging business or subsidize someone else’s.