Question 1

How much are card payment fees in the UK?

Accepted Answer

Card payment fees in the UK typically range from 1.5% to 3.5% per transaction, depending on the provider and card type. Debit card fees are usually lower (0.2%–1.5%) thanks to the interchange fee cap at 0.2%. Credit card fees are higher, with interchange capped at 0.3% for consumer cards. Flat-rate providers like SumUp charge 1.69% and Square charges 1.75% for in-person payments, while interchange-plus providers like Worldpay can offer rates from 0.75% for high-volume businesses.

Question 2

How can I reduce my card payment fees?

Accepted Answer

To reduce card payment fees: 1) Negotiate rates based on your monthly card turnover — providers offer better deals above £75,000 annually. 2) Choose interchange-plus pricing over flat-rate if you process over £10,000 monthly. 3) Encourage debit card payments over credit cards, as debit interchange is capped at 0.2%. 4) Process in-person rather than online where possible, as card-present rates are lower. 5) Review your merchant statements monthly to identify unnecessary charges. 6) Use a card payment fee calculator to compare providers.

Question 3

What is the average card payment fee for small businesses?

Accepted Answer

The average card payment fee for UK small businesses is between 1.5% and 2.5% per transaction. Most SMEs use flat-rate providers: SumUp charges 1.69%, Square and Zettle charge 1.75%, and Barclaycard charges 1.6% per in-person transaction. Your effective rate depends on your card mix (debit vs credit), average transaction value, and whether you accept payments in-person or online. Businesses processing over £100,000 annually can typically negotiate lower bespoke rates.

Question 4

How are card machine fees calculated?

Accepted Answer

Card machine fees have two components: 1) Terminal costs — either a monthly rental (£15–£35/month from providers like Worldpay and Barclaycard) or a one-off purchase (e.g., SumUp Air at £39, Square Reader at £19). 2) Transaction fees — a percentage of each sale (1.5%–2.5%) sometimes plus a fixed fee per transaction (e.g., Stripe charges 1.5% + 20p). Some providers like Dojo bundle both into a monthly package starting at £39.99. Additional fees may include PCI compliance (£5–£15/month), minimum monthly charges, and chargeback fees (typically £15–£25).

Question 5

What's the difference between debit and credit card payment fees?

Accepted Answer

Debit card payment fees are significantly lower than credit card fees due to EU interchange fee regulations that still apply in the UK. Consumer debit card interchange is capped at 0.2% of the transaction value, while consumer credit card interchange is capped at 0.3%. However, business and corporate cards are not subject to these caps, meaning fees can be 1.5%–3% or higher. Most flat-rate providers (SumUp, Square, Zettle) charge the same percentage regardless of card type, but interchange-plus providers pass on the actual cost difference, making debit transactions cheaper.

Question 6

Can I pass card payment fees on to customers?

Accepted Answer

In the UK, it has been illegal to charge customers a surcharge for paying by debit or credit card since January 2018, under the Payment Services Regulations 2017. This applies to all consumer transactions. However, businesses can set minimum card payment thresholds, offer cash discounts, or build card processing costs into their pricing. Some B2B transactions may have different arrangements, but consumer-facing surcharges are prohibited and can result in enforcement action by Trading Standards.

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