Card Payment Processing Fees Explained for UK Businesses
Understand the percentage, the pence and the fixed charges behind your card payment bill.
The short answer
Your total payment cost is the processing charge plus any fixed, annual and occasional fees that apply. A headline percentage is useful only when you know which cards and channels it covers, what else is charged and whether equipment or EPOS software sits on another invoice.
In this guide
Who does what when you take a payment?
The card machine captures an in-person payment. Your EPOS system records sales and may also manage stock, orders or tables. An online payment gateway provides the connection used to accept payments through a website. Acquiring and processing services handle the merchant side of the payment. One business may supply several of these services, or you may have separate agreements.
This distinction matters when comparing costs. Replacing a card terminal does not necessarily replace your till software, and changing your payment processor does not automatically end an equipment lease.
The four parts of a payment bill
| Cost | How it works | What to check |
|---|---|---|
| Percentage processing | A proportion of the payment value | Card type, issuing region and payment channel |
| Pence per payment | A fixed amount for a chargeable event | Successful payments, authorisations or other events |
| Recurring services | Monthly or annual charges | Terminals, software, connectivity, support and minimum charges |
| Occasional costs | Charges triggered by an event | Refunds, disputes, installation, replacement or leaving |
Public pricing can distinguish in-person, online and manually entered payments. Square’s UK pricing page is one example of this separation. Use the rate for your actual channel, not a price shown for a different type of sale.
Flat, blended and interchange-based pricing
A flat or blended tariff combines underlying processing costs into the quoted rate for the specified transactions. It may still have separate categories or exceptions. Check the definition rather than assuming that one price covers every card.
An interchange-based quotation separates underlying network costs from the provider’s own charges. If a quotation is expressed as a margin plus interchange and scheme fees, the margin alone is not your total processing rate. Ask for a cost estimate using your card mix and an explanation of any additional charges.
For the EPOS Savings comparison, use confirmed all-in rates for each card group. If underlying costs vary and cannot be represented reliably, mark the figure as unknown and request clarification.
Worked example: turn a rate into a monthly cost
A business takes £20,000 through 1,000 card payments each month. Assume every payment is charged at 1.2% plus 3p, with no minimum-charge shortfall.
- Percentage fee: £20,000 × 1.2%
- £240
- Payment fees: 1,000 × £0.03
- £30
- Terminal rental
- £25
- EPOS software
- £45
- Annual fee: £60 ÷ 12
- £5
- Total recurring monthly cost
- £345
That is £1.725 per £100 of card sales, rounded to £1.73 per £100. This broader cost measure includes the listed equipment and software charges; it is not the processing rate.
What is a good card processing rate?
There is no single percentage that establishes good value for every business. Compare the same sales, payment count, card mix and required services. A low headline rate with extra charges can cost more overall than a higher rate with fewer fixed charges.
Where available, use your provider’s summary box alongside the full contract and recent statements. The PSR’s direction requires specified providers to give covered merchants structured pricing information; the scope and conditions are set out in the source below.
Use one consistent VAT basis. Keep one-off purchases separate from recurring costs, and do not divide by bank payouts after deductions when your calculation needs gross card sales.
Price your actual card mix and every chargeable event
Ask the quote to distinguish debit, consumer credit, business or corporate cards, premium categories, overseas cards and American Express where accepted. Confirm the definitions and the proportion of your turnover in each group. A wallet brand alone does not establish the applicable fee; ask how the underlying card and payment channel are priced.
For flat or blended rates, identify exclusions. For interchange++ pricing, request the full expected cost including interchange, scheme charges and the provider margin. If a quote uses pricing tiers, ask which transactions enter each tier and what causes a higher charge.
Check monthly service and statement charges, gateway fees, batch or settlement events and any contractual volume commitment separately from a minimum fee. Use actual authorisation counts where they differ from successful sales. Our 13-part total-cost checklist puts these processing charges alongside the cost of the system supporting them.
Common questions
Does contactless always have its own fee?
Not necessarily. Check how your provider prices the underlying card and payment channel. The contactless symbol alone does not tell you the applicable rate.
Can a current-cost calculation show my savings?
It establishes your baseline. To calculate a saving or extra cost, you also need a comparable alternative quotation.
Put your own figures to work.
Use the free calculator to organise your costs and keep a report. If something is unclear, you can ask for a free initial review.
No registration required. Calculator entries stay in your open browser page unless you choose to share a report in a review request.
Sources and how to use this guide
Primary references checked on 15 October 2026:
Worked examples are original fictional scenarios, not customer results, market averages or provider quotations. Unless stated otherwise, they use a consistent VAT basis and include only the costs listed. Provider prices, eligibility and terms can change. Check your written agreement before deciding.
Our guides explain costs and comparison methods. They do not rank the whole market or claim hands-on product testing. Source links are references, not a claim of partnership. Read the calculation method and limitations, or about the service.
Explore the provider guides
Apply this method to named providers and your next purchasing decision:
SumUp Fees and Costs Explained · Square Fees and Costs Explained · Dojo Fees and Contract Costs Explained · takepayments Fees and Contract Costs Explained · Worldpay Fees and Pricing Explained
Explore the next question
Authorisation and Per-Transaction Fees Explained · Why Can Business and Overseas Cards Cost More to Accept? · Blended Pricing vs Interchange++: How to Compare