Cost per transaction (CPT)

Cost per transaction (CPT) is a financial metric that calculates the cost incurred every time a transaction is made. It is typically used in sectors with frequent transactions, such as travel, eCommerce, and financial services.

CPT captures all expenses involved in processing a single transaction and helps determine if transaction costs are aligned with revenue or if cost-reduction measures are needed. CPT also plays a role in setting up pricing models and determining service fees.

To calculate CPT, sum up all transaction costs associated with operating a business and divide the sum by the number of transactions within a certain period. For example, hotels determine CPT by including costs such as commission fees paid to OTAs, software maintenance expenses, staff time, and other operational expenses.