Card Processing Fees at a Glance
Your card processing bill is rarely about the headline rate. Total cost — pricing model, monthly add-ons and your card mix — is what decides it. We’d match the model to your turnover before chasing a low percentage.
| 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 | ~£75k–£100k+/yr turnover | Interchange + fixed markup | Variable, transparent |
UK interchange is capped at 0.2% on consumer debit and 0.3% on credit. That floor is fixed; the parts you can influence sit above it. Figures verified May 2026.
What Card Processing Fees Mean
Every card payment carries a Merchant Service Charge built from three parts, each paid to a different player. Knowing which is which is what lets you read a statement and challenge a quote.
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
Stack the three parts and you can see where the money leaks. Interchange is the capped base, scheme fees pile on top, and the acquirer markup is the only negotiable layer.
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, exempt from the caps, charges around 1.5%–3.5%.
The scheme layer is where costs are climbing. The PSR found Visa and Mastercard raised core fees more than 25% in real terms between 2017 and 2023 — an estimated £250m a year on UK businesses.
Main Card Pricing Models
Acquirers package those three parts into a pricing model. We’d choose the model by 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 |
Blended is predictable but you overpay on cheap debit cards to subsidise pricey ones. Interchange-plus shows every fee separately and wins at volume. Fixed-fee bundles sit in the middle for steady mid-range takings.
What Card Processing Fees Cost
Here’s what the main UK providers charged in May 2026. Compare like for like — in-person, online and keyed rates differ — and watch the fixed pence on low-value sales.
| 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 |
| Zettle by PayPal | 1.75% | 2.5% (invoices) | £0 |
| Stripe | 1.5% + 20p | 1.5% + 20p (UK) | £0; intl 3.25% + 20p |
| Worldpay | 1.5% (Simplicity) | 1.3% + 20p | Gateway £19.95/mo |
| Tyl by NatWest | 1.39% + 5p | 1.39% + 5p | £0; terminal rental |
| American Express | ~1.5%–3.5% | ~1.5%–3.5% | Cap-exempt |
Bespoke acquirers such as Barclaycard, Takepayments and Dojo quote on your volume rather than a flat rate. At scale, interchange-plus debit can fall to 0.3%–0.7% plus a few pence.
How to Reduce Your Card Processing Costs
Lower bills come from matching the model to your volume and auditing the add-ons — not from haggling the headline rate alone. We’d work through these five steps in order.
Hidden Fees and Surcharging Rules
The headline percentage rarely tells the whole story. Traditional acquirer contracts layer on extras, and the law limits how you can pass card costs to customers.
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 chargeback fee near £20 — whether you win the dispute or not.
Early-termination fees can run 50%–100% of the remaining terminal rental, and gateways add roughly £20 a month. Modern flat-rate providers tend to absorb PCI and monthly fees.
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
The expensive mistakes here are about reading the contract, not effort. These five quietly inflate what you pay — and each is avoidable.
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 clears roughly £75k–£100k a year, interchange-plus usually beats a blended rate.
- 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 of 50%–100% of the remaining rental can trap you with an uncompetitive provider.
When to Compare Card Processing Providers
You don’t need to switch on a schedule. We’d watch for the moment the numbers change, then compare on your own statement rather than a headline rate.
First, when your card turnover passes roughly £75,000–£100,000 a year and interchange-plus starts beating your flat rate. Second, when add-ons erode your margin. Third, when you’re locked in a rental or your channel mix shifts.
At that point, compare on your real volumes and card mix, not a headline percentage. Our payment-processing roundups are a sensible starting point for a shortlist.
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 sizeable — providers such as Worldpay and Barclaycard typically point to around £75,000–£100,000 a year as the threshold for bespoke interchange-plus pricing. 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. Most acquirers — Stripe, Worldpay, Takepayments and Barclaycard among them — charge an administrative chargeback fee of around £20 regardless of who wins, because 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
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 May 2026. A few provider keyed-entry rates we couldn’t confirm were left out rather than guessed. Provider pricing changes, so confirm current figures before you act.
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.