Card Processing Fees at a Glance
Work out what you pay per pound of card turnover, then compare models on that figure. A flat rate with no monthly fee beats a lower percentage carrying a monthly subscription until your takings are large enough to absorb it, which is why the cheapest provider for a market stall is rarely the cheapest for a busy restaurant. Flat-rate plans suit small, low-volume sellers and interchange-plus suits larger, steadier volumes, and your card mix and monthly add-ons move the figure as much as the advertised percentage does.
| Pricing model | Best for | Rate shape | Predictability |
|---|---|---|---|
| Blended / flat-rate | Micro and low-volume | ~1.4%–1.75%, no monthly fee | High |
| Fixed-fee bundle | Steady mid-range takings | Monthly fee + low % | High |
| Interchange-plus | Higher, steady volume | Interchange + fixed markup | Variable, transparent |
UK interchange is capped at 0.2% on consumer debit and 0.3% on credit, a ceiling set in law that no acquirer can negotiate away. What varies between quotes is what sits on top. Figures verified October 2026.
What Card Processing Fees Mean
Every card payment carries a Merchant Service Charge built from three parts, each going to a different company. Two of them are the same whoever you sign with. The third is your processor’s own margin, and it is the only line worth arguing about when a salesperson quotes you a rate.
Interchange goes to the customer’s card-issuing bank. It’s capped on UK consumer cards (0.2% debit, 0.3% credit), and you can’t negotiate it.
Scheme fees go to Visa and Mastercard for running the network. They aren’t capped, and the regulator says they’ve risen sharply since interchange was capped.
Acquirer markup is your processor’s margin for the terminal, gateway and settlement. Only the acquirer markup is ever up for negotiation.
How Card Processing Fees Are Built
What decides your actual rate is less the three parts than the card your customer happens to hand over. Two sales of the same value can cost you very different amounts, and nothing in your contract changes between them.
Card type changes everything. Commercial and corporate cards sit outside the caps and run 0.5%–1% higher. International cards add roughly 1.5%–2%. American Express is exempt from the caps and publishes no UK merchant rate.
The scheme layer is where costs are climbing. The PSR found Visa and Mastercard raised core fees by at least 25% in real terms between 2017 and 2023, and estimated that UK businesses now pay at least £170m a year more for them than seven years earlier.
Main Card Pricing Models
Acquirers package those three parts into a pricing model. The right model depends on your card turnover, because the cheapest option flips as you grow.
| Model | How it prices | Who it suits | Trade-off |
|---|---|---|---|
| Blended / flat-rate | One % for every card | Micro / low volume | Overpays on cheap debit |
| Fixed-fee bundle | Monthly fee covers a turnover band | Steady mid-range | Wasted in quiet months |
| Interchange-plus | Pass-through + fixed markup | Higher volume | Statement looks complex |
The trade-off in the table is really about who carries the risk of your card mix. On a blended rate the processor takes that risk and charges you an average, so a shop taking mostly consumer debit subsidises the businesses taking corporate cards. On interchange-plus you carry it yourself: a month heavy with commercial and international cards costs you more, and a quiet month of contactless debit costs you considerably less.
What Card Processing Fees Cost
The fixed pence matter more than the percentage if your average sale is small, because the same flat charge per transaction costs proportionally far more on a £3 coffee than on a large order. These are the rates the main UK providers charged in October 2026. Compare the in-person, online and keyed rates separately, because they are rarely the same number.
| Provider | In-person | Online | Monthly / notable |
|---|---|---|---|
| Square | 1.75% | 1.4% + 25p | £0; reader from £19 |
| SumUp | 1.69% (0.99% on Plus) | 2.5% | £0, or £19/mo Plus |
| PayPal Point of Sale | 1.75% | 2.5% (invoices, sellers who joined before 8 May 2023) | £0 |
| Stripe | 1.5% + 20p | 1.5% + 20p (UK) | £0; intl 3.15% + 20p (+2% if currency converts) |
| Worldpay | 1.50% on the Simplicity plan, or quoted | Quoted on application | Simplicity has no minimum monthly fee; 18-month card machine term |
| Tyl by NatWest | 1.39% + 5p | 1.39% + 5p | Up to £50k turnover; terminal from £13.99/mo + VAT |
| American Express | Not published | Not published | Cap-exempt |
Barclaycard publishes customised pricing rather than a flat rate, and its representative example for in-person debit is 0.7% plus 3p. Your own quote depends on your volume.
How to Reduce Your Card Processing Costs
Start with your own statement rather than a competitor’s price list. Divide last quarter’s total card fees by your total card turnover and you have the only number worth quoting at a salesperson. Then ask what your monthly add-ons bought you, because a PCI portal fee and a minimum service charge are easier to remove than a transaction rate is to renegotiate.
Hidden Fees and Surcharging Rules
Most of the charges below are monthly, which is what makes them expensive: they land whether you take one card payment or a thousand. A quiet January still pays the PCI fee and still pays the minimum service charge, so the quieter your trade the worse they bite.
Common add-ons: authorisation fees of 3p–5p per attempt, a PCI portal fee around £4.80–£5 a month, a minimum monthly service charge of £15–£20, and a dispute fee, such as Stripe’s £20, which it keeps even if you win.
Leave a terminal rental early and you can be billed for the months still to run, so the length of the contract tells you what walking away costs. Some gateways charge a monthly fee on top of that. Square, SumUp, PayPal Point of Sale and Stripe all list £0 a month on their basic plans, which is why a rental agreement deserves a second read rather than a signature.
On surcharging, the rules are strict. The Payment Services Regulations 2017 ban surcharging consumer debit and credit cards outright. You can surcharge commercial cards, but only up to your actual cost; genuine cash discounts stay legal.
Common Mistakes to Avoid
None of the mistakes below shows up as a line on your statement saying you have made one. They surface as a rate that looked competitive when you signed and no longer is, or as a monthly charge nobody has questioned in two years.
Five mistakes that inflate your card costs
- Judging on the headline rate. The advertised percentage ignores monthly fees, add-ons and your card mix: the effective rate is what you actually pay.
- Ignoring the add-ons. PCI fees, minimum monthly charges and gateway fees can dwarf a small difference in the transaction rate.
- Staying on flat-rate past the pivot. Once card turnover is large and steady enough for a processor to quote bespoke pricing, interchange-plus can beat a blended rate, so ask for a quote.
- Surcharging consumer cards. Adding a fee for paying by consumer debit or credit card is banned under the Payment Services Regulations 2017.
- Signing a long rental blind. Early-termination fees on the remaining rental can trap you with an uncompetitive provider.
When to Compare Card Processing Providers
Three things make a comparison worth your time, and none of them is the calendar: each is a sign that your business has changed shape since you signed.
Your card turnover grows to the point where a processor will quote you interchange-plus rather than a standard rate. Your add-ons start costing more than the transaction fees they sit beside. Or your trade moves: a shop that opens an online store, or a trader who stops taking cash, is no longer buying the same thing it signed up for.
Take your own statement to that comparison, with your real card mix on it, and ask each provider to quote against those numbers. Our payment-processing roundups set out what the main UK acquirers charge and who they suit, which is enough to build a shortlist of three before anyone rings you.
Frequently Asked Questions
What is the average card processing fee in the UK?
There isn’t a single number, because your effective rate depends on your pricing model, card mix and add-ons. As a rough guide, flat-rate providers charge around 1.4%–1.75% in person, while high-volume merchants on interchange-plus can pay well under 1% on standard UK debit cards plus a few pence per transaction. The honest answer is to work out your own effective rate: total fees divided by total card turnover.
Can I charge customers a fee for paying by card?
Not for consumer cards. The Payment Services Regulations 2017 ban surcharging on consumer debit and credit cards, and the rules are enforced by Trading Standards. You can surcharge a commercial or corporate card, but the surcharge must not exceed your actual cost of accepting it. Offering a genuine cash discount is legal, provided you don’t inflate the base price just to disguise a card fee.
What are interchange fees and are they capped?
Interchange is the part of the fee paid to the customer’s card-issuing bank. In the UK it’s capped at 0.2% for consumer debit cards and 0.3% for consumer credit cards, and you can’t negotiate it. Commercial and corporate cards sit outside the caps and cost more, as do international cards and American Express, which is exempt from the caps and sets its own merchant rates.
When does interchange-plus beat a flat rate?
Usually once your card turnover is consistent and large. The PSR describes merchants on interchange-plus as typically the largest, generally with turnover above £50 million, and no provider publishes a single switching point. Below that, flat-rate or fixed-fee plans are simpler and often cheaper once you account for monthly fees. Compare both on your own effective rate before switching.
Are chargeback fees refundable if I win the dispute?
Generally no. Stripe, for example, charges £20 for each dispute it receives and does not return that fee if you win; only its separate £20 fee for countering a dispute comes back. Other acquirers set their own chargeback fees, and the fee covers handling the dispute, not its outcome. The way to control this cost is to reduce disputes in the first place with clear billing descriptors, good records and responsive customer service.
How we researched this guide
Sources. Pricing comes from provider pricing pages; interchange caps and surcharging rules from UK regulations; market data from the Payment Systems Regulator and the British Retail Consortium.
Open and forward-looking items. The PSR’s market review (MR22/1.10, March 2025) and its 2026 remedy consultations are still developing, so we present proposed price controls and reporting rules as planned, not settled.
Verification date. Rates, fees and thresholds were verified in October 2026. A few provider keyed-entry rates we couldn’t confirm were left out rather than guessed. Provider pricing changes.
Affiliate disclosure. Some links on our payment processing pages are affiliate links. This guide is editorial content and our recommendations are not influenced by commercial relationships. See our editorial policy for details.