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Compare Card Processing Fees For UK SMEs (2024 Rates) ms payment logos

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Card Processing Fees and Rates For UK Merchants

11th Dec 2023: Added a table showing the merchant service fees for Worldpay, Barclaycard, Elavon, Global Payments, Clover and Square.

4th Aug 2022: Updates made to original 2020 article with Non-transactional processing fees split into Scheduled fees and Incidental fees.


Fees incurred for processing card payments can be roughly split into two types; fees incurred for each specific transaction and monthly or one-off costs charged for the payment services and hardware (e.g. POS terminals).

We’ll cover both types but let’s start with the card processing fees charged for each transaction which are bundled into one charge known as a merchant service charge (MSC). 

Transaction Fees

Businesses normally see their transaction fees combined into one line on their monthly merchant statement (See our guide on how to read merchant statements with examples here).  This is typically labelled as the merchant service charge. 

Merchant service charge (MSC)

The merchant service charge is made up of 3 main components: 

Card Processing Fees

Below is a hypothetical example of a 0.95% merchant service charge (MSC) paid on a £100 transaction using a UK-issued Visa credit card accepted in the UK on a card terminal:

MSC calculation: 0.3% (interchange) + 0.7p + 0.02% (scheme fees) + 0.56% (acquirer fee) = £0.95

Equates to: 30p interchange + 9p scheme fees + 56p acquirer fee = £0.95 

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Card processing fees charged by popular merchant service providers

As the table chart shows, rates vary dramatically depending on the provider, where the card payment was taken (whether the payment in taken) and the card type. The rates below are just for UK card transactions for retail transactions. You can expect another 1%+ to be added for non-UK card transactions. American Express and other premium cards may also incur higher fees.

Most providers offer a sliding scale of rates with the transaction rates decreasing as card turnover increases. 

 WorldpayBarclaycardElavonGlobal PaymentsClover (First Data)Square
Transaction Fees
In Person – Debit Card0.4% – 0.6%0.6% – 1.75%0.91%1.0% – 1.7%0.45% – 0.68%1.75% + 25p
In Person – Credit Card0.7% – 1%0.95% – 2.45%1.01%1.1% – 1.7%0.8% – 1.25%1.75% + 25p
In Person – Business Card1.8% – 2.1%2.52% – 2.75%1.41%2.1% – 2.8 %1.75% – 2.19%1.75% + 25p
Online – Debit Card0.7% – 1.0%0.85% – 2.05%0.95%1.0% – 1.7%0.60% – 0.83%2.5% + 25p
Online – Credit Card1.1% – 1.9%1.2% – 2.75%1.05%1.1% – 1.7%1.05% – 1.50%2.5% + 25p
Online – Business Card2.2% – 2.5%2.25 – 2.82%1.85%2.1% – 2.8 %2.02% – 2.47%2.5% + 25p
Authorisation Fee4.5p4.5p4p4p3.25p0p
Per Chargeback£20£20£25£25£25£0
Other monthly charges
POS terminalFrom £20From £28From £26From £25N/AOne-Off Price
Payment GatewayIncludedIncluded£28£1910p per transactionIncluded
PCI DSS£5£5£6£25£4.99Included
Minimum monthly
service charge (MMSC)

Fees are accurate as of 11th Dec 2023 and are to be used as an indicative guide. 

Apart from the fees for Square, the information above was taken from the online quotation tools published by each provider mandated by the Payment Systems Regulator. A retail business was used for the business type with an average transaction value around the £25 mark (some only allowed ranges and not exact figures). The Annual card turnover input ranged from £25,000 up to £10M to get the range of transaction fees.

Acquirer Fees

These are the card processing fees charged by the acquirer to cover their fees and profit margin. They are also known as the acquirer markup or processing fees.

Acquirer fees are variable and can be negotiated down (which is what we do). 

It is hard to give a typical processing fee as they vary so much based on the acquirer and the factors outlined below. However, as a rough guide, most processing fees would be between 0.8% – 2.6%. 

If a merchant was not recruited directly by an acquirer but by a merchant service provider (i.e. an ISO like Paymentsense or a payment gateway provider), the processing fees will include the fees retained by the acquirer to cover their costs and profit margin plus the commission paid by the acquirer to the merchant service provider. This commission is paid as a reward for finding, onboarding and managing the relationship with the merchant.

For example, TakePayments is an ISO and uses Barclaycard for its acquiring services. TakePayments may charge a merchant a 0.6% processing fee which will cover 0.4% retained by Barclaycard for their acquiring services plus 0.2% commission Barclaycard pay to TakePayments (Note: these rates are hypothetical).

Interchange fees 

These are the card transaction fees that card acquirers pay to issuers each time a card is used to buy goods or services. They are typically charged as a fixed percentage and non-negotiable. 

Typical interchange fees are 0.2% for debit cards and 0.3% for credit cards for UK consumer cards. Rates are higher for commercial cards. 

See our guide to interchange fees here which includes a table of interchange fees. 

View Interchange rates for Visa | Mastercard

The main factors determining the level of interchange fees are:

Card scheme fees

This is another name for the card company (e.g. Mastercard) and each card scheme charges different interchange fees.

Card-present vs card-not-present (CNP)

Card-not-present transactions such as those done over the phone, through a virtual terminal, or online, are usually considered riskier than transactions done in person so they tend to have higher interchange rates. 

Merchant category code (MCC)

The MCC is a four-digit used by credit card companies to categorise businesses. Those businesses operating in a category that is deemed lower risk may be offered lower interchange fees. 

Consumer vs. commercial

Commercial cards typically incurs higher interchange fees than cards issued to consumers.

Transaction regionality

Domestic transactions, when the card-issuing bank or organisation is in the same country as the business, will be cheaper than cross-border transactions.

Card authentication

The way the customer authenticates themselves (e.g. chip and PIN, contactless) can also affect the interchange rate.

Reward cards

Finally, reward cards are another key factor that influences the interchange rate amount. When customers pay for their goods or services using a reward card, the interchange fees tend to be higher. That’s because the increased fees pay for the extras offered by reward programs. 

Interchange rate caps

There are dozens of interchange fees and pretty complex but they are all published online. 

It is worth noting that the Interchange Fee Regulation (IFR) changes in December 2015 capped interchange fees on most card transactions (typical interchange fees are 0.2% for debit cards and 0.3% for credit cards). 

Mastercard and Visa revised the interchange fees for transactions between the UK and EEA from October 15th 2021 due to the UK leaving the EEA. 

See a more comprehensive guide to interchange fees here.

Scheme fees 

Scheme fees are paid by card acquirers to the operators of card payment systems such as Mastercard, Visa and UnionPay to cover their maintenance costs for providing their payment network. 

The total scheme fee is composed of assessment fees, cross-border fees, clearing and settlement fees. The card type used and the geographical location of the acquirer will affect the total amount charged. 

Scheme fees are fixed and non-negotiable and are made up of a payment technology fee and a base fee. These fees are determined by:

  • Type of card (e.g. corporate, consumer)
  • Type of transaction (card present or card not present)
  • Authorisation fees
  • Transaction volume/size
  • Cross-border transaction costs
  • Licensing fees
  • Scheme fees for reports
  • Anti-money laundering processes and fraud prevention
  • Marketing and innovation funds

As you see, scheme fees are influenced by similar factors as interchange rates.

Regionality Credit/Debit Capture method Scheme Fee % Scheme Fees per item
Domestic Debit CHP 0.04% € 0.01
eComm (3DS) 0.05% € 0.03
MOTO or eComm (non-3DS) 0.05% € 0.01
Recurring 0.05% € 0.01
Credit CHP 0.04% € 0.01
eComm (3DS) 0.05% € 0.03
MOTO or eComm (non-3DS) 0.05% € 0.01
Recurring 0.05% € 0.01
Intra-UK-EEA Debit CHP 0.14% € 0.02
eComm (3DS) 0.30% € 0.04
MOTO or eComm (non-3DS) 0.30% € 0.02
Recurring 0.30% € 0.02
Credit CHP 0.14% € 0.02
eComm (3DS) 0.30% € 0.04
MOTO or eComm (non-3DS) 0.30% € 0.02
Recurring 0.30% € 0.02
Intra-Regional Debit CHP 0.04% € 0.02
eComm (3DS) 0.05% € 0.04
MOTO or eComm (non-3DS) 0.05% € 0.02
Recurring 0.05% € 0.02
Credit CHP 0.04% € 0.02
eComm (3DS) 0.05% € 0.04
MOTO or eComm (non-3DS) 0.05% € 0.02
Recurring 0.05% € 0.02
Inter-Regional Debit CHP 0.49% € 0.11
eComm (3DS) 1.02% € 0.13
MOTO or eComm (non-3DS) 1.02% € 0.11
Recurring 1.02% € 0.11
Credit CHP 0.70% € 0.11
eComm (3DS) 1.02% € 0.13
MOTO or eComm (non-3DS) 1.02% € 0.11
Recurring 1.02% € 0.11
JurisdictionCapture methodScheme Fee %Scheme Fees per item
DomesticCHP0.12%€ 0.01
 eComm (3DS)0.15%€ 0.04
 eComm (non-3DS)0.15%€ 0.01
 MOTO0.17%€ 0.01
Intra-SEPA EURCHP0.12%€ 0.01
 eComm (3DS)0.15%€ 0.04
 eComm (non-3DS)0.15%€ 0.01
 MOTO0.17%€ 0.01
Intra-SEPA NEURCHP0.17%€ 0.01
 eComm (3DS)0.15%€ 0.04
 eComm (non-3DS)0.15%€ 0.01
 MOTO0.17%€ 0.01
Intra-Non SEPACHP0.60%€ 0.15
 eComm (3DS)0.20%€ 0.17
 eComm (non-3DS)0.20%€ 0.15
 MOTO0.25%€ 0.15
Inter-RegionalCHP0.57%€ 0.11
 eComm (3DS)0.62%€ 0.13
 eComm (non-3DS)0.62%€ 0.11
 MOTO0.67%€ 0.11

Non-transactional card processing fees

As well as the merchant service charge applied to different types of purchase transactions (which includes the interchange fees, scheme fees and the net revenue of the merchant service provider) there are several non-transactional merchant account fees that are charged.

ItemWhat Is It?Typical Fees
Terminal RentalThe rental charge for the chip and PIN card machines£14-35 per month
Payment GatewayIntegration of hosted checkout pages and an API for custom development£20-£75 per month
Virtual TerminalSoftware to support telephone and mail order transactions£15-£75 per month
Early Termination FeeThis fee is charged if the contract is terminated early – will depend on the length remaining on the contractVaries
Setup FeeFixed cost at the start of the contract£150
Minimum Monthly Service Charge (MMSC)Min amount charged each month on transaction fees£5 – £25 per month
PCI ComplianceMonthly Fee charged to meet PCI compliance standards£2 – £20 per month
PCI Non-ComplianceOne off fine for failing to keep your account compliant with PCI DSS standards0.30%
ChargebackFee for each transaction reversed£15
RefundsFee for processing refunds30p – 50p

Terminal rental

Merchant acquirers and ISO’s will offer card terminals as part of their package and offer a monthly fee with minimum contracts (typically longer than 2 years). Longer contracts tend to lead to lower monthly fees.

The card terminal costs will sometimes be paid directly to the terminal provider and not the acquirer or ISO.

For example, if you have a contract with Paymentsense your terminals will be supplied by First Data Global Leasing or Paytek who you will pay directly via direct debit each month.

Fees will vary according to the type (fixed, portable or mobile), brand (i.e. Ingenico, Verifone) and model. You should expect to pay between £14 – £35 per month per card terminal rented from a merchant account provider. 

You can see the cost differences in renting vs buying card machines here.

Payment gateway monthly fixed fee

Many ISOs and acquirers offer payment gateway services as part of their full-service package and charge a monthly fee.

Payment gateway software is typically between £15 – 25 per month. It should also be noted transaction fees will be charged at a higher rate as they will be classed as card-not-present transactions.

When you opt into a fixed payment gateway fee, it usually comes with a number of transactions included. For example, Worldpay offers payment gateway services in partnership with Pay360 and charges £19 per month for their standard gateway and £45 per their advanced package which includes more transactions, international payments and more checkout options like Apple Pay.

Virtual terminal fee

If you are taking fees over the phone or via mail you’ll need virtual terminal software. This offers essentially the same functionality as a payment gateway but it is not customer-facing. If you already pay payment gateway fees it is unlikely you will be charged extra for virtual terminal functionality.

Early termination fee

If you want to switch credit card payment processors before the end of your agreed term, you may need to pay an early termination fee. How much you’ll pay will depend on who you are dealing with, and how early you’re terminating the contract. An early termination fee could end up costing from a few hundred pounds to a few thousand.

Set up fee

Some payment processing platforms will charge you an account set-up fee. Although you shouldn’t expect to pay more than £99 in set-up fees, this is a cost that can be avoided with some negotiation or shopping around.

Minimum monthly service charge (MMSC)

Most credit card processing providers will demand a minimum monthly service charge which is typically around £5-£25.

The MMSC only applies if your monthly transaction processing fees don’t meet the minimum amount agreed.

PCI compliance fee

When handling sensitive data, such as customer credit card details, you’ll need to make sure you’re doing so in compliance with Payment Card Industry Data Security Standards. Your business will need to undergo a series of checks, to make sure it’s not exposing customers to risk or fraud. What these ‘checks’ look like will depend on the size of your business and how many transactions you process.

The more popular merchant account providers will manage PCI compliance on the merchant’s behalf. The charge for managing this is typically around £5 – £20 per month with additional costs for ASV scans.

The cost of PCI compliance will vary between what level your business is (between 1 and 4). Level 1 businesses will have the lowest PCI compliance costs. The largest businesses can expect to pay thousands per year.

Chargeback fees

If a customer requests a refund directly from their card issuer rather than from the merchant then the bank that issued the card may initiate a chargeback to reverse the payment.

Some acquirers always charge a fee when a chargeback is raised. Others will only apply the fee if the chargeback is upheld or if it exceeds a certain value.

Chargeback fees are typically around £15.

Refund fees

A Refund fee is incurred when a merchant requests a refund directly from the merchant and agrees to refund the money after the return or exchange of a product or report of dissatisfaction with a service. This differs from a chargeback when the consumer receives the credit directly from his or her card issuer.

Refund fees are typically around 30p – 50p.

Typical card processing fees

You can see below from PSR analysis carried out on the average MSC charges by Barclaycard, Elavon, Global Payments, Lloyds Bank Cardnet and Worldpay that they vary significantly depending on the size of the card turnover.

Compare Card Processing Fees For UK SMEs (2024 Rates) Screenshot 2022 05 16 at 14.31.01

In general, there is a strong relationship between the MSC fee and the level of card turnover.

Why are card processing fees not published?

Unlike payment facilitators like Zettle and SumUp which publish fixed prices on their websites, most acquirers and ISOs provide bespoke quotes and don’t have fixed fees. They will consider several factors to determine what payment processing fees they will quote for a specific business including:

  • The total value of transactions the business accepts per year 
  • The merchant category code (MCC)
  • The average transaction value (ATV) of the business
  • The range of card types the business accepts
  • The channels used to accept payments (i.e. face to face, online, MOTO)
  • The sector the business operates in (e.g. is it high risk?)
  • If the business is new to cards or switching providers

How to negotiate the lowest card processing fees

Most sales staff in merchant acquirers and ISOs have some authority to negotiate prices within set parameters. 

The value of card transactions a merchant accepts is one of the most important considerations for acquirers and ISOs when providing quotes to a merchant. 

A higher volume of transactions can also improve your negotiating position.

Whilst all acquirers recognise the need to be price competitive they are very protective over their profit margins and will try and differentiate themselves through other elements like the quality of customer service, hardware provided, contract terms, integration possibilities, etc.

Payment Processing Pricing Models Compared

What is the difference between blended, IC+, IC++ and fixed processing fees?

When it comes to paying card transaction fees, businesses are typically offered standard (aka blended) pricing. 

Approximately 98% of all small and medium-sized businesses are on standard / blended pricing and will not qualify for the lower fee IC+ or IC++ pricing.  

Around 35% of large merchants with annual card turnover above £50 million have IC+ or IC++ pricing and 55% have standard pricing.  You can see more details on the differences in the blended and IC+ pricing models here.

Table: Pricing types offered by the main merchant acquirers

Compare Card Processing Fees For UK SMEs (2024 Rates) Merchant Acquirer Pricing Options v2

Standard / Blended pricing

The acquirer or ISO does not automatically pass through the interchange and scheme fees at cost price. They also don’t split out the interchange and scheme fees when they publish the merchant service charge (MSC) on monthly statements. 

IC+ pricing

The interchange fee applicable to that transaction is automatically passed on to the merchant at cost by the acquirer. The scheme fees are not contractually passed on at cost price. 

IC++ pricing

The interchange fee and scheme fees for any given transaction are contractually passed on to the merchant at cost by the acquirer (so the processing fee recovers some or all the acquirer’s other costs plus their margin). This fee structure is a far more transparent approach to card transaction fees, and so is normally only available to the highest card turnover businesses. 

Fixed pricing

The amount paid is fixed for all consumer present transactions if card turnover stays below certain limits (i.e at the time of writing Square offers a fixed 1.75% processing fee for card terminal transactions and 1.9% for online payments using European cards). 

These credit card processing fees tend to be popular with low card turnover businesses even though they are relatively expensive rates due to no minimum term contracts being required. 

Large merchants generally pay lower MSCs no matter which pricing option they are on as the acquirers are happy to reduce their margin due to the higher card turnover.

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