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

Compare payment processors and secure the lowest payment processing fees for your business


UK Card Processing 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) or merchant discount rate (MDR).

Merchant service charge (MSC)

There are three main elements that make the fees charged on each transaction:

These elements are normally blended together for most small businesses and combined into one line on their monthly merchant statement and normally labelled as the merchant service charge (MSC).  
The acquirer fee will normally make up the highest proportion of the MSC and is the only element that varies across payment service providers. Only 2% of businesses in the UK see breakdown of these elements on their statements as they will be on an IC+ or IC++ pricing model and not blended. 

Compare Card Processing Fees For UK SMEs (2024 Rates) UK card processing fees merchant savvy


Acquirer Markup

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

Acquirer fees are the only element of the transaction charges that are variable between providers and provide the opportunity for savings. 

It is hard to give a typical processing fee as they vary so much by the card used, if the transaction is domestic or inter-regional, if the card holder is present, the merchant category code and the acquirer.  

If a merchant was not recruited directly by an acquirer but an independent sales organisation the acquirer markup will need to cover the acquirers profit margin, costs and commission they need to pay to the ISO. This commission is paid as a reward for finding, onboarding and managing the relationship with the merchant.

For example, Handepay is an ISO and uses Evo Payments for its acquiring services. Handepay  may offer a merchant a blended rate of 1.5% for processing in person transactions which will cover 1.2% retained by Barclaycard for their acquiring services plus 0.3% commission Evo Payments pay to Handpay (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 incur 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.

Following the UK withdrawal from the EU, transactions between the UK and the EEA are now being re-classified as inter-regional transactions and incur higher card-not-present (CNP) fees.

Compare Card Processing Fees For UK SMEs (2024 Rates) UK EU Interchange fees

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. 

As you can see in the chart below, UK merchants can be thankful they benefit from interchange fees far below the US.

Chart: International Interchange Rates

Compare Card Processing Fees For UK SMEs (2024 Rates) Us vs UK interchange fees

Consumer credit cards are regulated in Europe with in-person interchange fees capped at 0.30% per transaction. China and Australia have similar regulations and in Canada Visa and Mastercard have agreed to limit their fees on average to 1.40%.

Unfortunately, there are no interchange fee caps protecting US merchants or network routing competition resulting in some of the highest interchange fees in in the world.

See a more comprehensive guide to interchange fees here.

Card 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.

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.

Item What Is It? Typical Fees
Terminal Rental The rental charge for the chip and PIN card machines £14-35 per month
Payment Gateway Integration of hosted checkout pages and an API for custom development £20-£75 per month
Virtual Terminal Software to support telephone and mail order transactions £15-£75 per month
Early Termination Fee This fee is charged if the contract is terminated early – will depend on the length remaining on the contract Varies
Setup Fee Fixed 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 Compliance Monthly Fee charged to meet PCI compliance standards £2 – £20 per month
PCI Non-Compliance One-off fine for failing to keep your account compliant with PCI DSS standards 0.30%
Chargeback The fee for each transaction reversed £15
Refunds Fee for processing refunds 30p – 50p
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
Jurisdiction Capture method Scheme Fee % Scheme Fees per item
Domestic CHP 0.12% € 0.01
  eComm (3DS) 0.15% € 0.04
  eComm (non-3DS) 0.15% € 0.01
  MOTO 0.17% € 0.01
Intra-SEPA EUR CHP 0.12% € 0.01
  eComm (3DS) 0.15% € 0.04
  eComm (non-3DS) 0.15% € 0.01
  MOTO 0.17% € 0.01
Intra-SEPA NEUR CHP 0.17% € 0.01
  eComm (3DS) 0.15% € 0.04
  eComm (non-3DS) 0.15% € 0.01
  MOTO 0.17% € 0.01
Intra-Non SEPA CHP 0.60% € 0.15
  eComm (3DS) 0.20% € 0.17
  eComm (non-3DS) 0.20% € 0.15
  MOTO 0.25% € 0.15
Inter-Regional CHP 0.57% € 0.11
  eComm (3DS) 0.62% € 0.13
  eComm (non-3DS) 0.62% € 0.11
  MOTO 0.67% € 0.11

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 charge blended rates for the main categories of payments (consumer or business cards for in-person and card not present transactions) and do not split out the interchange and scheme fees when they publish the merchant service charge (MSC) on monthly statements.  

Splitting out the interchange and scheme fees is fairly complex given how much they vary by card type and really only beneficial for high turnover businesses (which is why it is only done for about 2% of businesses in the UK). 

IC+ pricing

The interchange fee applicable to that transaction is automatically passed on to the merchant at cost by the acquirer and split out on statement. 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 but more complex to compile and analyse. 

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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Examples of card processing fees charged

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. 

  Worldpay Barclaycard Elavon Global Payments Clover (First Data) Square
Transaction Fees
In Person – Debit Card 0.4% – 0.6% 0.6% – 1.75% 0.91% 1.0% – 1.7% 0.45% – 0.68% 1.75% + 25p
In Person – Credit Card 0.7% – 1% 0.95% – 2.45% 1.01% 1.1% – 1.7% 0.8% – 1.25% 1.75% + 25p
In Person – Business Card 1.8% – 2.1% 2.52% – 2.75% 1.41% 2.1% – 2.8 % 1.75% – 2.19% 1.75% + 25p
Online – Debit Card 0.7% – 1.0% 0.85% – 2.05% 0.95% 1.0% – 1.7% 0.60% – 0.83% 2.5% + 25p
Online – Credit Card 1.1% – 1.9% 1.2% – 2.75% 1.05% 1.1% – 1.7% 1.05% – 1.50% 2.5% + 25p
Online – Business Card 2.2% – 2.5% 2.25 – 2.82% 1.85% 2.1% – 2.8 % 2.02% – 2.47% 2.5% + 25p
Authorisation Fee 4.5p 4.5p 4p 4p 3.25p 0p
Per Chargeback £20 £20 £25 £25 £25 £0
Other monthly charges
POS terminal From £20 From £28 From £26 From £25 N/A One-Off Price
Payment Gateway Included Included £28 £19 10p per transaction Included
PCI DSS £5 £5 £6 £25 £4.99 Included
Minimum monthly
service charge (MMSC)
£15 £15 £30 £30 £25 N/A

Fees are accurate as of 11th Jan 2024 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.

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