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Compare Payment Processor Fees
Compare preferential rates and card processing offers from the UK’s leading merchant account providers
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Compare payment processors and secure the lowest payment processing fees for your business
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Compare payment processors and secure the lowest payment processing fees for your business
In 2022, UK retailers spent £1.26 billion on card processing fees. For the first time, debit card payments alone broke the £1 billion mark.
One factor driving this trend is the average transaction cost rising from £0.055 in 2016 to almost £0.085 in 2022. In percentage terms (per transaction), credit card costs have risen much more than debit cards, while interchange fees have risen due to Brexit.
88% of in-person and 84% of ecommerce spending transactions were made on debit or credit cards in the UK in 2023 (either directly or via digital wallets) so any reduction in card processing fees will have a significant impact on average transaction fees. will have
Credit and debit card merchant fees include a combination of transaction fees, monthly fees and one-off incidental fees which include:
Your payment processing fees you pay will vary significantly depending on:
Details of your fee types and rates should be broken down in your merchant card statement (we have a guide on how to read a merchant statement). Many processors bundle all their fees together, meaning some unnecessary or overly expensive items may be hidden.
We can audit your current statement to check if you are being overcharged for certain services – or worse, to see if you’re being charged for products or services you don’t need.
So, here are some actions you could take to reduce your card processing fees:
Let’s start with the most obvious. The largest savings typically comes from switching to a new payment processor. Shopping around for quotes is a quick and easy way to compare prices, or use our simple comparison tool where you will find preferential rates.
At the very least, you will then have some leverage to use with your current processor to negotiate lower fees. Remember, just because interchange and scheme fees are non-negotiable, it doesn’t mean your acquirer markup and payment processor fees aren’t up for negotiation.
You may or may not want to get quotes from other providers first (see above). However, it is always worth asking your current provider to reduce their rates. Some points worth mentioning to help you gain leverage include:
Many payment service providers such as ISOs don’t actually carry out the payment processing but work as a sales channel for merchant acquirers. You can often get better fees by going to the acquirers directly and cutting out the middleman.
Payment orchestration can be used to select the most cost-effective payment route from multiple acquirers based on cost and reliability. The growing number of payment orchestration platforms like Corefy, Br-dge and Fabrick can make this simple to implement. The result should be keeping fees down while maintaining consistent authorisation rates.
Like mobile roaming fees, payment fees are generally lower if transactions are processed locally. Select the most suitable payment route for your business and region to minimise cross-border charges. Giving customers the option to pay with domestic card schemes can reduce processing costs (e.g. offering Cartes Bancaires for French customers will have lower fees than Visa and Mastercard). Typically, using a local acquirer where possible will cut costs, and many providers make this easy to set up via an API.
If your current payment processor lacks API support or doesn’t offer a wide range of local payment options, consider switching.
Alternative payment methods (APMs) or local payment methods can deliver significant savings. The World Payments Report 2025 points out that while businesses pay up to 3% per card transaction, A2A payments can be just “a few cents” in comparison.
A2A refers to ‘Account-to-Account’, which uses the relatively new infrastructure of Open Banking. It typically has lower fees for merchants because there are fewer intermediaries – think of it as a more direct bank transfer. Some examples of providers that facilitate bank account payments include Pay by Bank in the UK, ACH in the US, SEPA Instant in Europe, Pix in Brazil and iDEAL in the Netherlands.
Some payment processors will have access to 100+ payment methods, making it easy to integrate the ones most relevant to your customer base. Plus, A2A payments can help reduce fraud and chargebacks due to their use of customer bank details.
Global losses from online payment fraud are expected to reach $43.47 billion 2028 which equates to 6.4 cents in each $100 spent. To minimise fraud and mitigate some chargebacks, check the additional services provided by your payment processor. Subscribing to AI-powered fraud detection tools can help spot suspicious activity, while 3D Secure can reduce risks by verifying buyer identities. Whether or not these packages are worth subscribing to may be down to how common fraud and chargebacks are in your industry.
Having clear product descriptions and refund policies can be a free way to cut down on misunderstandings, and fewer chargebacks can also lead to better processing fee agreements.
Look for merchant service providers that offer lower rates at certain thresholds of processing volumes. Card processing fees are typically inversely related to card turnover. This means that as your company grows, you can explore opportunities to reduce your processing fees. Some merchants are clear about offering this economies of scale, while others may force you to consider switching providers. Some providers suit low volumes, others suit high.
Some payment processors offer lower transaction fees for batch processing. This is where multiple transactions are consolidated into a single request. This minimises the frequency of individual processing charges. By grouping various transactions, you incur a single fee that could equate to a lower overall cost per transaction.
Batch payments are a strategy particularly important for businesses with small but frequent transactions. For example, low margin but high volume. This is taken a step further when your provider schedules batch processing during low-traffic periods, which may further boost your fee savings. Some providers allow you to have some level of influence over the batch processing schedule.
Some MCCs incur higher fees as they are deemed higher risk. For example, a travel company is prone to chargebacks and thus has higher fees. But, if you’re selling suitcases and neck pillows (low risk), your MCC may wrongly be categorised, meaning you’re paying the same as a travel agent (high risk). Double-check you have been assigned the correct code by contacting the provider, where you can push for the lowest applicable risk category.
The tokenisation of card details can be done with a Digital wallet (i.e. using Apple Pay or Google Pay), and this helps obfuscate sensitive information. This can lead to lower processing fees because it reduces the risk of fraud (less chance of a data breach) and minimises the scope of PCI DSS compliance.
Tokenisation also helps when it comes to boosting authorisation rates. According to Visa, the embedded tokenisation leads to a 2.1% higher authorisation rate on average. False declines are less frequent because tokens are automatically updated with the latest card details. This is particularly useful for recurring transactions, and with this reduced friction, your compliance efforts and fees can be reduced.
Fixed pricing is offered by payment facilitators like Square, Sumup and Zettle which have relatively high fixed fees for card payments made in person or online. Unless you are a small business taking less than £25,000 annually in card payments, you can likely make significant savings by switching to a payment processor that uses blended or IC+ pricing.
Plus, some providers have tiered IC+ pricing structures, meaning you can negotiate more (Stripe, for example, is less open to negotiation due to the fixed fee structure). In general, IC+ and IC++ pricing have the best transparency, so the margin your provider is taking is clear to see (helpful for negotiation).
The longer the duration between taking and settling your payments, the more risk you’re generating and the higher your fees become. Try and settle your transactions at the end of every day to keep your risk profile strong and avoid fee hikes.
Rigorously assess the validity of all additional fees. Annual fees, statement fees, non-sufficient fund fees, and various others should be scrutinised and cross-checked with other providers. To better your understanding of these fees and what they mean, learn how to read a merchant statement.
Compare Payment Processor Fees
Compare preferential rates and card processing offers from the UK’s leading merchant account providers
You’ll only deal with our in-house payment experts
Your details will not be shared
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