Card machine fees explained: what UK businesses actually pay

By our UK business utilities specialists · Updated 4 July 2026

Ask ten business owners what they pay to take card payments and most will quote a single percentage — the one from the advert or the last sales call. Almost none of them actually pay that number. Card acquiring is priced in layers, and the headline rate is only one layer. Understanding the stack is the difference between a genuine comparison and switching to a deal that costs you more.

The layers underneath every card payment

When a customer taps their card, the fee you pay is split between several parties:

• Interchange — paid to the customer's card-issuing bank. For UK domestic consumer cards this component is capped by regulation (the Interchange Fee Regulation, retained in UK law), with debit capped lower than credit. Commercial and business cards are not capped, which is why a corporate credit card costs you noticeably more to accept than a personal debit card.
• Scheme fees — paid to the card network (Visa, Mastercard, American Express) for carrying the transaction.
• Acquirer margin — what your payment provider keeps. This is the only layer that is genuinely negotiable, and it is where a comparison earns its keep.

Blended vs interchange-plus pricing

Providers package those layers in two main ways:

• Blended pricing — one flat percentage per transaction type. Simple to read, but the blend hides how much margin sits on top of interchange, and cheap-to-process cards subsidise expensive ones.
• Interchange-plus (IC+) — you pay the actual interchange and scheme fees at cost, plus a stated acquirer margin. More transparent and usually better value for businesses with meaningful card turnover, but the statements take more reading.

Neither is automatically right. A market stall taking occasional payments is often better on a simple pay-as-you-go reader; an established shop or restaurant with steady card takings usually does better on a negotiated contract — but only if the extras below are kept honest.

The fees that hide below the headline

These are the lines that turn a good-looking rate into an expensive contract:

• Terminal rental — a monthly charge per device. Watch especially for terminals leased through a separate leasing company on a multi-year agreement: that lease survives even if you switch acquirer, and it is the single most common nasty surprise we see on statements.
• PCI compliance fees — a monthly or annual charge for the security compliance programme, plus a separate (and usually larger) non-compliance fee if you have not completed the self-assessment questionnaire. Many businesses pay non-compliance fees for years without realising a short annual form would remove them.
• Authorisation fees — a small fixed amount per transaction on top of the percentage. On a business taking lots of low-value payments — cafés, takeaways, convenience stores — pence per transaction can matter more than the percentage rate.
• Minimum monthly service charge — if your card takings dip below a threshold, you pay the minimum anyway. Seasonal businesses should check this line carefully.
• Statement, gateway and reporting fees — recurring admin charges that vary widely between providers.
• Chargeback fees — charged per disputed transaction, on top of losing the transaction amount itself.
• Early termination fees — the cost of leaving a fixed-term acquiring contract early, which matters when you are timing a switch.

The only number that matters: your effective rate

Because the stack varies so much, the honest way to compare providers is to reduce everything to one figure: total monthly cost divided by monthly card turnover. Take a recent statement, add every fee on it — percentages, authorisation fees, rental, PCI, minimums, the lot — and divide by what you took in card payments that month. That is your effective rate. Do the same arithmetic on any proposal you receive, using your own card mix and transaction sizes, and the comparison becomes like-for-like.

This is exactly the exercise a good payments broker does for you: read the statements, rebuild the true cost, and put quotes side by side on the same basis. It is also why we never publish "typical rates" on this site — the honest answer depends on your turnover, your average transaction value, and the mix of cards your customers use.

Questions to ask before signing anything

• Is the terminal rented from you, or leased through a separate company — and for how long?
• What is the contract term, the notice period, and the early termination fee?
• Are commercial and premium cards charged at a different rate — and what is it?
• What are the authorisation fee, PCI fee, minimum monthly service charge and settlement time?
• Is the quote based on my actual statements, or on assumptions?

If a salesperson cannot answer those plainly, that tells you what you need to know.

Getting your statements reviewed

Our payments specialists compare UK providers on true effective cost, using your real statements rather than headline rates. The service is free to your business — if you switch, the provider pays us a commission, and we disclose that arrangement openly. The quote form on our homepage takes under a minute, and a UK-based specialist will call you back to talk through what your current setup is really costing.

More guides

• Choosing a card machine: countertop, portable or mobile?
• Switching merchant services provider without missing a sale