If you're selling digital products, the platform you choose can make a surprisingly big difference to what you actually keep from each sale.
Etsy and Payhip solve the same basic problem — hosting a product, taking payment and delivering a file — but they do it in almost opposite ways. Etsy is a marketplace: you list inside an established search and discovery environment where buyers can find products from sellers they may not already know. Payhip is primarily a storefront and checkout platform: you bring your own traffic and sell through a store you control, while also having the option of applying for Payhip's marketplace.
So which one makes more sense?
The answer depends largely on how you expect people to find your products, where you sell, the payment options available in your country and how much you're likely to sell.
Prices, fees, payment-processing rates, marketplace requirements, tax arrangements and platform features can vary by country and can change. The information in this article was checked against current platform information available on 16 September 2026. Where a country-specific example is used, it is clearly identified as an example rather than a universal rate.
Payhip vs Etsy at a glance
| Feature | Payhip | Etsy |
|---|---|---|
| Free to open a shop | Yes — Free plan, $0/month | No recurring monthly subscription for the standard seller offering, although a one-time shop set-up fee may apply depending on location |
| Listing fee | None | $0.20 USD per listing, generally active for 4 months or until it sells; renewal and additional-quantity fees can apply |
| Platform transaction fee | 5% (Free) / 2% (Plus) / 0% (Pro) | 6.5% transaction fee, with no lower transaction-fee tier to upgrade into |
| Payment processing | Via your own Stripe/PayPal account; actual fees vary by processor, country and transaction | Etsy Payments; processing rates vary according to the seller's location |
| Built-in buyer marketplace | Yes — marketplace access requires eligibility and approval, including at least $10 USD in genuine sales | Yes — established marketplace search and discovery |
| Optional paid ads | No direct equivalent to Etsy Offsite Ads | Offsite Ads can add a percentage fee to qualifying sales attributed to Etsy's off-site advertising. The rate and participation rules depend on the shop's circumstances |
| Tax handling | Payhip handles certain indirect taxes in specified jurisdictions, while other tax obligations can remain with the seller | Etsy collects and remits certain marketplace-facilitated taxes where applicable |
Payhip pricing
Payhip has three main plans:
- Free: $0/month + 5% transaction fee
- Plus: $29/month + 2% transaction fee
- Pro: $99/month + 0% transaction fee
Payment-processing fees are separate from Payhip's platform fee and depend on the payment processor, country and transaction.
The important thing about the Free plan is that there is no monthly subscription to cover while you're still trying to make your first sales.
Etsy pricing
Etsy doesn't charge a recurring monthly subscription for its standard seller offering, although some sellers may be charged a one-time shop set-up fee depending on location. Etsy's fee structure can include a listing fee, a transaction fee, payment-processing fees and, depending on the seller and transaction, other applicable fees.
- Listing fee: $0.20 USD per listing. A listing generally remains active for four months or until it sells. Renewal and additional-quantity fees can apply.
- Transaction fee: 6.5% of the applicable order amount. Etsy's transaction-fee rules can include certain amounts such as shipping and gift wrapping where applicable.
- Payment processing: Etsy Payments processing rates vary according to the seller's bank country. The processing fee is separate from Etsy's 6.5% transaction fee.
There is no recurring monthly subscription on Etsy's standard offering, but sellers pay transaction-related fees when they list and sell. Unlike Payhip, Etsy's 6.5% transaction fee does not reduce when you move to a higher subscription tier.
Etsy also charges Offsite Ads fees on qualifying sales attributed to its off-site advertising. The applicable rate and whether participation is optional or mandatory depend on the shop's sales history and other Etsy rules.
Some Etsy sellers can also face additional country-specific fees, such as regulatory operating fees, currency-conversion fees or other charges. These fees are not universal Etsy fees, so they are not included in the basic global comparison above.
What does that mean on a $20 sale?
Here's a simple US-based illustration. Payhip's payment processing runs through your connected payment processor, so the actual processor charge depends on the processor, country and transaction. For illustration, the calculation below uses roughly 2.9% + $0.30. Etsy's US Etsy Payments rate is 3% + $0.25. These figures are intended to show the platform-fee difference using one specific country's processing rates rather than quote the exact processing costs for every seller worldwide.
| Platform | Platform fee | Illustrative processing | Approx. fees |
|---|---|---|---|
| Payhip Free | $1.00 (5%) | $0.88 | ~$1.88 — you keep ~$18.12 |
| Payhip Plus | $0.40 (2%) | $0.88 | ~$1.28 — you keep ~$18.72, before the $29/month plan cost |
| Payhip Pro | $0 | $0.88 | ~$0.88 — you keep ~$19.12, before the $99/month plan cost |
| Etsy | $0.20 listing + $1.30 (6.5%) = $1.50 | $0.85 | ~$2.35 — you keep ~$17.65 |
These figures are a US-based illustration of the platform and processing fees and are not a quote of your actual payment-processing costs. Fees can differ substantially in other countries.
How much difference does the platform fee make?
Platform fee only, before payment processing, at three price points:
- $10 sale: Payhip Free $0.50 · Payhip Plus $0.20 (+$29/mo) · Payhip Pro $0 (+$99/mo) · Etsy $0.85 ($0.20 listing + $0.65 transaction)
- $20 sale: Payhip Free $1.00 · Payhip Plus $0.40 (+$29/mo) · Payhip Pro $0 (+$99/mo) · Etsy $1.50 ($0.20 listing + $1.30 transaction)
- $50 sale: Payhip Free $2.50 · Payhip Plus $1.00 (+$29/mo) · Payhip Pro $0 (+$99/mo) · Etsy $3.45 ($0.20 listing + $3.25 transaction)
Using these listed platform fees alone, Payhip's Free plan has a lower percentage platform fee than Etsy's 6.5% transaction fee, and Payhip does not charge a listing fee. Etsy sellers may also have other applicable fees depending on their country and circumstances.
When does Payhip Plus make sense?
The basic calculation is straightforward.
$29 ÷ 3% = approximately $966.67
That's the approximate monthly sales level at which paying $29 for Payhip Plus and reducing the platform fee from 5% to 2% produces the same platform-fee cost as staying on the Free plan.
That's before considering any other differences between the plans, and it does not include payment-processing fees.
What about the Payhip marketplace?
Payhip also has a marketplace where eligible products can potentially be discovered by shoppers who are already browsing for digital products.
Marketplace access isn't simply automatic as soon as you create an account. Payhip currently requires at least $10 USD in genuine sales before a seller can request marketplace approval. The product then goes through review, and approval can take up to 10 days.
Payhip does not add a separate marketplace fee on top of your normal plan transaction fee.
What about Etsy's marketplace?
Etsy's marketplace is central to the platform. Buyers can search Etsy for products from sellers they may not already know, giving sellers access to marketplace discovery that Payhip does not currently provide at the same scale.
That discovery comes alongside Etsy's transaction and listing fees, as well as competition with other sellers appearing in the same marketplace search results.
Payhip takes a different approach. Your Payhip store is primarily a storefront and checkout that you can send your own customers to, while its marketplace provides an additional discovery channel for sellers who meet its eligibility requirements.
Tax and VAT handling
Both platforms handle a significant amount of indirect tax administration, but the details differ by platform and jurisdiction.
Payhip currently collects and remits certain indirect taxes on qualifying digital product sales in specified jurisdictions. Its tax-handling responsibilities vary depending on the seller's location, the buyer's location and the type of transaction.
Etsy similarly collects and remits applicable marketplace-facilitated sales taxes, VAT, GST and other indirect taxes where required by the relevant rules.
The important point is that tax treatment is not identical worldwide. The platform may collect and remit certain taxes while the seller can still have separate obligations relating to income tax, business registration, record-keeping or other local requirements.
Sellers should therefore check the current tax documentation for their own country and the markets in which they sell rather than relying on a single global tax rule.
Which is cheaper for your own traffic?
If you're bringing customers yourself through Pinterest, LinkedIn, SEO, email or social media, the customer is arriving because of traffic you've generated rather than because they discovered your product through Etsy's marketplace search.
For that type of sale, the basic platform-fee comparison is straightforward: Payhip's Free plan charges a 5% platform transaction fee with no listing fee, while Etsy charges a 6.5% transaction fee plus its $0.20 listing fee, before payment-processing costs and any other applicable fees.
That doesn't make the two platforms interchangeable. Etsy provides established marketplace discovery, while Payhip is primarily designed around selling through your own traffic and audience, with its own marketplace available to eligible sellers.
For Pinterest sellers, the traffic source matters
Pinterest sends people to a specific page rather than into a marketplace search. A pin that clicks through to an Etsy listing still incurs Etsy's applicable transaction and listing fees even though the customer's visit came from your Pinterest traffic rather than Etsy's own search.
A pin that sends someone to a Payhip checkout instead incurs Payhip's applicable plan transaction fee, with no listing fee. On the Free plan, that's 5% of the sale before payment-processing costs.
For a seller whose customers are coming primarily from Pinterest rather than Etsy's marketplace, the comparison is therefore about the cost of processing a sale you've generated yourself versus the marketplace discovery and infrastructure Etsy provides.
Disclosure: This article includes a link to Payhip's free sign-up. If you choose to sign up through my link, I may earn a commission in the future, at no extra cost to you. This does not affect the information or comparison in this article.
Want to start selling digital products?
Payhip lets you create a store without paying a monthly subscription on its Free plan. You can upload digital products, take payments and start selling without building a full ecommerce website.
Payhip vs Etsy: the practical difference
There isn't one platform that works identically for every seller. The useful comparison is how each one fits the way you intend to sell.
- If you're bringing your own traffic: Payhip's Free plan has a 5% platform transaction fee and no listing fee, while Etsy charges a 6.5% transaction fee plus its listing fee and applicable payment-processing charges.
- If you're interested in marketplace discovery: Etsy has an established marketplace search where buyers can discover products from sellers they may not already know. Payhip also has a marketplace, but access requires eligibility and approval.
- If you're considering tax administration: Both platforms handle certain indirect taxes in specified circumstances, but the exact treatment depends on the seller, buyer, product and jurisdiction. Sellers can still have separate tax obligations of their own.
- If you're starting with little or no revenue: Payhip's Free plan has no monthly subscription and no listing fees, so an unsold or slow-moving product doesn't incur a Payhip listing charge. Etsy doesn't require a recurring monthly subscription for a standard shop, but listings cost $0.20 USD and some sellers may also face a one-time shop set-up fee.
Frequently asked questions
Is Payhip really free?
Payhip's Free plan costs $0/month and has no listing fees. Payhip takes a 5% transaction fee on sales made through the platform, and your payment processor charges its own separate fee.
Is Etsy free to use?
Etsy does not require a recurring monthly subscription for its standard seller offering, but listings cost $0.20 USD and Etsy takes a 6.5% transaction fee plus a separate payment-processing fee. Some sellers may also be charged a one-time shop set-up fee.
Does Payhip have a marketplace?
Yes, but marketplace access isn't automatic. You currently need at least $10 USD in genuine sales before you can apply, and products/accounts are subject to review and approval.
Does Etsy have a marketplace?
Yes. Etsy's marketplace allows buyers to search for products from sellers they may not already know, making marketplace discovery a central part of the platform.
Does Payhip handle VAT and sales tax?
Payhip handles certain indirect taxes on applicable transactions in specified jurisdictions. The exact treatment varies by seller location, buyer location and transaction, and sellers can still have separate tax obligations.
Does Etsy handle VAT and sales tax?
Yes, Etsy collects and remits certain marketplace-facilitated taxes, VAT, GST and other indirect taxes where required. The exact treatment varies by seller location, buyer location and transaction.
Which one has lower fees?
For a sale you generate yourself through Pinterest, social media or your own audience, Payhip's Free plan has a 5% platform transaction fee and no listing fee, while Etsy charges a 6.5% transaction fee plus its $0.20 USD listing fee, before payment-processing costs and any other applicable fees. Etsy can also have additional country-specific or advertising-related fees depending on the seller and transaction.
Final thoughts
Etsy and Payhip take different approaches to selling digital products. Etsy combines the storefront with an established marketplace where buyers can search for products from sellers they may not already know. Payhip is primarily a storefront and checkout platform for sellers who bring customers through their own traffic sources, while also offering a marketplace for eligible sellers.
For sellers bringing traffic from Pinterest, email, SEO or social media, the relevant comparison is the cost and features attached to a sale they generated themselves. Payhip's Free plan currently has a 5% platform transaction fee and no listing fee, while Etsy charges a 6.5% transaction fee plus its listing and payment-processing fees.
For sellers who specifically want marketplace search and discovery, Etsy provides that channel as part of its platform. Some sellers may also choose to use both platforms, depending on how they want customers to find and buy their products.
Platform pricing, fees, tax arrangements, marketplace requirements and features can change. Always check the current terms and pricing directly with Payhip or Etsy before making a business decision. Payment-processing fees vary by processor, country and payment method, and examples in this article are illustrative rather than universal.