Where the money goes on every card payment
When a customer pays by card, three parties take a share of the fee you pay:
- Interchange: paid to the customer’s card issuer. For UK consumer cards it is capped at 0.2% for debit and 0.3% for credit under the UK’s Interchange Fee Regulation. Business and many international cards are not capped the same way and cost more.
- Scheme fees: paid to Visa, Mastercard and other card schemes.
- Acquirer margin: what your card machine provider or acquirer keeps for processing, the terminal, support and risk.
Pay-as-you-go providers wrap all three into one flat percentage. Contract providers may show them separately (often called interchange++ or interchange-plus-plus) or as blended rates per card type.
Published pay-as-you-go rates
In-person payments, as published by each provider on 16 October 2026: SumUp, Square, PayPal POS / Zettle, Lloyds Cardnet. Keyed, online, invoice and some international cards cost more.
On flat rates the maths is simple: £5,000 of monthly card takings costs £84.50 at 1.69% or £87.50 at 1.75%.
Every fee you might see on a quote
| Fee | What it is | Watch out for |
|---|---|---|
| Transaction rate | A percentage of each sale, flat or by card type | Different rates for debit, credit, business and non-UK cards |
| Authorisation fee | A fixed fee per transaction (often a few pence) | Hurts businesses with lots of small sales |
| Terminal fee | Monthly rental or subscription per machine | Separate long leases that outlast the payments contract |
| Minimum monthly charge | Topped up if your fees fall below a set amount | Seasonal businesses in quiet months |
| PCI compliance fee | Charged if you don’t complete your yearly security check | Easy to avoid by completing the questionnaire |
| Refund and chargeback fees | Per refund or disputed payment | Retailers with many returns |
| Early termination fee | Cost of leaving before the minimum term ends | Auto-renewal clauses |
Flat rate or quoted rate: which is cheaper?
Flat rates are easy to budget but include a margin on every card. A quoted rate can be lower per transaction, but monthly fees and per-transaction charges come on top. To compare fairly:
- Take a recent month’s takings and number of transactions (your current statement shows both).
- Work out the flat-rate cost: takings × rate.
- Work out the quoted cost: (takings × quoted rate) + (transactions × authorisation fee) + monthly fees.
- Repeat for a quiet month, to see the effect of minimum charges.
Subscription plans sit in between. SumUp’s Payments Plus costs £19 a month for a headline 0.99% rate, which beats 1.69% pay as you go once eligible card takings pass about £2,714 a month (£19 ÷ 0.70%). See our worked example.
Five ways to cut your card fees
- Get quotes once a year, using your latest statement. Large acquirers must remind you when your minimum term ends.
- Remove authorisation fees if your average sale is small, or choose a flat rate.
- Don’t pay for idle terminals: return machines you don’t use.
- Complete your PCI questionnaire to avoid non-compliance fees.
- Don’t surcharge consumers to recover fees: it’s not allowed. See the rules.
Last updated: 16 October 2026
