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Compare payment processors and secure the lowest payment processing fees for your business
- Receive preferential rates from trusted payment processors
- Compare multiple merchant service providers from a single source
- Back up support throughout the agreement with the provider you choose
Compare payment processors and secure the lowest payment processing fees for your business
- Receive preferential rates from trusted payment processors
- Compare multiple merchant service providers from a single source
- Back up support throughout the agreement with the provider you choose
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Compare payment processors and secure the lowest payment processing fees for your business
Contents
Credit Card Merchant Fees – Guide & Latest Rates
Credit card processing fees for payments made in person are typically between 0.7% and 3.4% of the total transaction amount and 0.4% – 1.7% for debit cards. Transaction fees for online or phone payments will be slightly higher due to the increased risk of fraud.
Card processing fees can be divided into two categories: fees incurred on each specific transaction and incidental costs for the products and services used to process payments. We’ll start with the transaction fees which are typically bundled into one merchant service charge.
Merchant service charge (MSC)
Three types of fees combine to make up the total card processing fees charged on each card payment transaction.
This total is called the merchant service charge (MSC) which is paid by merchants to acquirers who then pay the issuing banks and card schemes.
- Interchange fees are fees charged by card issuing banks (i.e. HSBC, Natwest) and paid by the acquirer. They are non-negotiable.
- Scheme or assessment fees are fees paid by card acquirers to the operators of card payment systems such as Mastercard and Visa for providing their payment network. They are non-negotiable and are updated regularly (often twice a year).
- The acquirer’s markup is the total remaining that makes up the acquirer’s net revenue from the transaction which will cover their costs and profit margin. As it is variable and determined by the acquirer, it is often negotiable (unless they charge a fixed rate for all merchants) which is how we can deliver savings for businesses that use our service.
Scheme fees and interchange fees are fixed costs that remain the same regardless of which payment processor a merchant uses.
Only the acquirer markup is negotiable and what we focus on to reduce card processing fees for your business.
Did you know... The cheapest credit card processing fees are the ones with the lowest markup on top of the non negotiable interchange and assessment fees.
Below is an example of the fees charged by two payment processors for a £100 transaction using a UK-issued Mastercard credit card accepted in the UK online. Square has a fee of 1.65% and Worldpay charges 1.10% (this is an indicative rate but will not be the same for all businesses).
Square: MSC Fee = 1.65%
- 0.3% (interchange) + 0.7p + 0.02% (scheme fees) + 1.32% (acquirer markup)
- Equates to: 30p interchange + 9p scheme fees + £1.26 acquirer fee = £1.65
Worldpay: MSC Fee = 1.10%
- 0.3% (interchange) + 0.7p + 0.02% (scheme fees) + 0.78% (acquirer markup)
- Equates to: 30p interchange + 9p scheme fees + 78p acquirer fee = £1.10
As you can see, Square keeps an additional 0.55% (55p) charged on the MSC which equates to an extra 62% of revenue compared to Worldpay.
Most UK businesses will have all three fee types combined into one merchant service charge (MSC) shown on their monthly merchant statement and will not see how much their payment processor is making on their transactions after they have paid the fixed card scheme and interchange fees.
Only 2% of businesses in the UK will be provided with a breakdown of these three elements on their merchant statement. This transparency is available to those companies that are on an IC+ or IC++ pricing model but most businesses are on a blended rate (this is covered in the pricing model section below).
Let’s break down the MSC into its three components: interchange fees, scheme fees and the acquirer’s markup.
Interchange fees
These are fees paid by the acquirer to the customer’s card issuer to cover handling costs, bad debt costs, and the risk involved in approving the payment. They are typically charged as a fixed percentage and non-negotiable.
Interchange fees are 0.2% for debit cards and 0.3% for credit cards for UK transactions made in person or online. Unfortunately, they have increased significantly for UK merchants with European customers since the UK left the EU in 2020.
See our guide to interchange fees here which includes a table of interchange fees.
View Interchange rates for Visa | Mastercard
Mastercard and Visa revised the interchange fees for transactions between the UK and EEA (0.2% for debit cards and 0.3% for credit cards) from October 15th 2021 due to the UK leaving the EEA.
| Regulation/Commitment | Region | Card Present | Card Not Present |
|---|---|---|---|
| Interchange Fee Regulation | Domestic/Intra-regional | Debit: 0.2% | Debit: 0.2% |
| Credit: 0.3% | Credit: 0.3% | ||
| European Commission Commitments from Global Schemes | Inter-regional | Debit: 0.2% | Debit: 1.15% |
| Credit: 0.3% | Credit: 1.5% |
Card not present transactions (i.e. online or over the phone) between the UK and EU became reclassified as ‘intra-regional’ and no longer ‘intra-EEA’. This means they were no longer governed by by the Interchange Fee Regulation (IFR) and Visa and Mastercard exploited the opportunity to increase their fees above the previous cap they were no longer bound by.
This change meant UK merchants had their interchange increased fivefold on CNP transactions made by their EU customers (debit card fees increased from 0.2% to 1.15% and consumer credit cards from 0.3% to 1.5%).
See a more comprehensive guide to interchange fees here.
Added payment processing costs due to leaving the EU The payment system regulator estimated UK merchant selling online to EU customers paid an extra £150-£200 million in 2023 due to these interchange increases. Their Dec 2023 interim report proposes a price cap to protect UK businesses from what they view as 'overpaying on these interchange fees'
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 the rates often change it is best to go directly to the website of the card scheme to get teh most up to date rates. most accurate and up-to-date way to find the current rates is to check the card scheme’s website.
| 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 |
Acquirer Markup (our opportunity for savings)
The acquirer markup will normally make up the highest proportion of the total transaction costs for UK businesses (in the US the interchange fees will normally be much higher as they don’t have a cap like the EU and UK do).
Acquirer fees are the only element of the transaction charges that vary between payment processors and provide the opportunity for us to deliver savings for your business.
If a merchant was not recruited directly by an acquirer but by an independent sales organisation (ISO) the acquirer markup will need to cover the acquirer’s profit margin, costs and the 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.
Incidental Payment Processing Fees
As well as the merchant service charge, businesses may also incur several other costs in order to process card payments. Some are charged monthly and some are based on a certain event occurring (e.g. ending a contract or incurring a chargeback). We list the most common of these costs below.
| 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 |
Card Machines – monthly fee
Merchant acquirers and ISO’s will often offer card payment machines 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. Merchants can also buy card machines outright but they are typically leased on a monthly basis.
The card machine 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 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. Some may charge extra fees per gateway transaction once a certain number has been exceeded in a month (i.e. Worldpay had a package which charged 10p for each additional gateway transaction above 350 transactions in a month).
You can also pay for a stand-alone payment gateway that integrates with your acquirer of choice (i.e. Use Cardstream for your gateway and Worldpay as your acquirer). You can see more details of the fees charged by the most popular payment gateway providers here.
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 an online payment gateway but it is not customer-facing.
SME’s can expect to pay £15-£75 per month for a virtual terminal but 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 to a few thousand pounds. Check the termination fees and notice period before you sign up with a payment processor.
Some payment processors to offer pay some or all of this fee to entice merchants to switch over to them but always read the small print on these offers. They often claw back this cost through other hidden fees or minimum thresholds that need to be met.
Set up fee
Some payment processing platforms will charge you an account set-up fee. Most SMEs will not be charged more than £100 for setting up their account.
Minimum monthly service charge (MMSC)
Most credit card processing providers will demand a minimum monthly service charge which is typically around £20-£25. The MMSC only applies if your monthly transaction processing fees don’t meet the minimum amount.
PCI compliance fee
The more popular merchant account providers will manage PCI compliance on their merchant’s behalf. The charge for managing PCI compliance 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.
Card processing fees charged by payment processors
Below is the range of fees charged by some of the most popular payment processors in the UK.
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| Worldpay | Barclaycard | Elavon | Global Payments | Clover | Square | Zettle | SumUp | |
|---|---|---|---|---|---|---|---|---|
| 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 | 1.75% | 1.69% |
| Credit Card | 0.7% – 1% | 0.95% – 2.45% | 1.01% | 1.1% – 1.7% | 0.8% – 1.25% | 1.75% + 25p | 1.75% | 1.69% |
| Business Card | 1.8% – 2.1% | 2.52% – 2.75% | 1.41% | 2.1% – 2.8 % | 1.75% – 2.19% | 1.75% + 25p | 1.75% | 1.69% |
| Online | ||||||||
| Debit Card | 0.7% – 1.0% | 0.85% – 2.05% | 0.95% | 1.0% – 1.7% | 0.60% – 0.83% | 2.5% + 25p | – | 2.50% |
| Credit Card | 1.1% – 1.9% | 1.2% – 2.75% | 1.05% | 1.1% – 1.7% | 1.05% – 1.50% | 2.5% + 25p | – | 2.50% |
| Business Card | 2.2% – 2.5% | 2.25% – 2.82% | 1.85% | 2.1% – 2.8 % | 2.02% – 2.47% | 2.5% + 25p | – | 2.50% |
| Authorisation Fee | 4.5p | 4.5p | 4p | 4p | 3.25p | 0p | ||
| Per Chargeback | £20 | £20 | £25 | £25 | £25 | £0 | £0 | |
| Other monthly charges | ||||||||
| POS terminal | From £20 | From £28 | From £26 | From £25 | N/A | One-Off Price | One-Off Price | One-Off Price |
| Payment Gateway | Included | Included | £28 | £19 | 10p per transaction | Included | £0 | Included |
| PCI DSS | £5 | £5 | £6 | £25 | £4.99 | Included | £0 | Included |
| Minimum monthly service charge (MMSC) | £15 | £15 | £30 | £30 | £25 | N/A | £0 | Included |
Note that the fees in the table for Worldpay, Barclaycard, Elavon, Global Payments and Clover are from their online quotation tools mandated the the Payment Systems Regulator. These fees are indicative and not offered for all businesses. If a range is shown, the lower figure is for higher turnover businesses. The fees for Square, Zettle and SumUp are from their websites.
The correlation between higher card turnover and lower card processing fees offered was highlighted by research carried out by the PSR.
Why do many payment service providers not publish their fees?
Whilst payment facilitators like Paypal, Stripe, Zettle and SumUp publish fixed prices on their websites, most payment service providers only offer bespoke quotes on application.
This is frustrating for the merchant but having a bespoke quote will often result in significant savings as your fees will be based on your business and not based on the average profile of thousands.
n order to offer you a bespoke quote, payment processors will consider several factors 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.
Beware of instant payment processing fee quotes Beware of companies offering instant quotes from multiple providers when you fill in a few details on a form. You will either (1) not receive any instant quotes and have your details passed to up to 5 providers or (2) receive instant quotes from providers that will be higher than if you went to them directly or via us.
Factors that increase and decrease card processing fees
Let’s start with the factors that affect the cost of card processing and then the three types of fees that are combined to make up the total fee charged for each card transaction.| Lower Fees | Higher Fees | |
|---|---|---|
| Card holder present (CNP) or not | In-person (i.e. card machine payments) | Online, pay by link, phone payments |
| Card Type | Debit cards | Credit, commercial, corporate or business cards |
| Card Issuer Location | Domestic UK card | Issued by a different EEA member state, outside the EEA |
| Transaction Location (Domestic or Inter-regional) | Within the UK for card-not-present payments (domestic), within the UK and EEA for in-person payments (Inter-regional) | Outside the UK for card-not-present payments |
| Card Scheme | Visa, Mastercard | Diners, American Express, UPI, JCB |
| Merchant Category Code (MCC) | Low-Risk MCC | High-Risk MCCs |
| Annual Card Turnover | Higher card turnover | Low card turnover |
| Average transaction value (ATV) | High ATV | Low ATV |
| Payment processor signed with | Acquirer directly | Payment facilitator (i.e. SumUp, Zettle, Stripe) |
Different card schemes have different schemes and interchange rates associated with them. Non Union Pay, JCB, American Express etc) It is also worth noting that other payment methods such as digital wallets and open banking will have their own fee structure.
Card-not-present (CNP) 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.
The merchant category code (MCC) is a four-digit used by credit card companies to categorise businesses. Those businesses operating in a high-risk category are likely to be offered higher fees.
Commercial cards typically incur higher interchange fees than cards issued to consumers.
Domestic transactions (i.e. when the card-issuing bank or organisation is in the same country as the business) will be cheaper than cross-border transactions when the payments are made in person.
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.
Payment processor pricing models compared
>There are 4 types of pricing models offered by payment service providers; Blended, Fixed, Interchange Plus (IC+) or Interchange plus plus (IC++).
Table: Pricing types offered by the main merchant acquirers
Acquirer | IC++ | IC+ | Standard | Fixed |
|---|---|---|---|---|
Adyen | ||||
AIB Merchant Services | ||||
Barclaycard | ||||
Lloyds Bank Cardnet | ||||
Elavon | ||||
EVO Payments | ||||
First Data | ||||
Global Payments | ||||
Stripe | ||||
Worldpay |
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.
Standard / Blended pricing
The blended model charges the same rate for different payment types and interchange fees are not passed on at the cost price. The acquirer makes more profit on some transactions than others rather than the fixed markup they would receive on IC+ or IC++ pricing models.
Fixed Pricing
The amount charged for each type of transaction is fixed and typically used by payment facilitators like Square, SumUp or Paypal. For example, Square only have 3 fee categories for their UK merchants:
- In Person (card present): 1.75%
- Online: 0.4% + 25p for UK cards or 2.5% + 25p for non-UK cards
- Manually keyed payments (via the Square POS app, virtual terminal, use a card on file): 2.5%
Fixed pricing may keep things nice and simple but most businesses will make significant savings by switching to other payment processors that don’t hide such a high markup in their fees. They are popular with lower turnover businesses due to their ease of set-up and absence of any contractual tie-ins.
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. This fee structure is a far more transparent approach to card transaction fees but more complex to compile and analyse which is why it is only done for about 2% of businesses in the UK which are typically have an annual turnover in excess of £50 million.
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.
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