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UK card processing rates, explained
The rate is not the price. Two quotes at 1.4% can cost different money, because the percentage is one of five or six charges and the others are where the difference usually lives.
What you are actually charged
A card payment costs the acquirer three things, and every pricing model is a different way of passing those on to you.
- Interchange — paid to the bank that issued the customer’s card. In the UK this is capped for consumer debit and credit cards, and uncapped for commercial and non-UK cards.
- Scheme fees — paid to Visa or Mastercard.
- The acquirer’s margin — theirs.
Interchange caps are the reason a headline rate can be honest for one basket and misleading for another. A UK consumer debit card is cheap to process. A business credit card issued abroad is not, and nothing about the way it is presented at your counter tells you which one you are holding.
The three pricing models
Blended
One percentage for everything, sometimes with a fixed pence charge per transaction. Simple to read and simple to budget. The catch is that a blended rate is usually quoted for domestic consumer cards, with a separate and much higher rate for commercial, corporate and international ones. If a shop takes a lot of business cards, the effective rate lands well above the headline.
Interchange plus
You pay actual interchange, plus actual scheme fees, plus a fixed margin. More transparent, and usually cheaper at volume, because you keep the benefit when a cheap card is used. Harder to compare between suppliers, because the only number you are really comparing is the margin, and it is a harder statement to read on an invoice.
Flat, all cards
One percentage that genuinely covers everything. Rarer, and the easiest to check against a statement, because the rate on the quote and the rate on the statement are the same number. This is what we do, at a flat 1% on UK debit and credit cards, with Amex and commercial cards quoted separately and in writing rather than folded in silently — card payments has the detail.
The charges beside the rate
- Authorisation fee — a few pence per transaction. On a shop with a low average basket this can exceed the percentage. A £3 sale at 1% is 3p; a 2p authorisation fee on top is another two thirds again.
- Terminal rental — typically £15–£25 a month per terminal, often on its own contract with its own end date.
- PCI compliance fee, and a larger non-compliance fee if the annual questionnaire is not completed.
- Minimum monthly service charge — a floor that only bites in a quiet month.
- Chargeback fee — per disputed transaction, win or lose.
- Settlement delay — not a fee, but next-day and three-day settlement are different working-capital positions.
How to work out what you actually pay
Take your last card statement. Add every charge on it, including rental, authorisation fees and compliance charges. Divide by the total value processed. That percentage is your real rate, and it is normally a good deal higher than the one on your quote. Compare that number, not the headline.
Do this before you talk to anyone new. If your effective rate is already below what you are being offered, you have your answer without a demo — and any honest supplier will tell you the same.
What a rate difference is worth
On £30,000 a month of card takings, each 0.1% is £30 a month, or £360 a year. The gap between 1% and 1.75% is £2,700 a year on the same shop. That is why the card rate deserves more of your attention than the software licence, and why a supplier who will not put the rate in writing is telling you something.
Questions to ask any acquirer
- What is the rate for UK consumer debit, and for consumer credit?
- What is the rate for commercial, corporate and international cards?
- Is there an authorisation fee per transaction, and how much?
- What is the monthly minimum, if any?
- Is the terminal rented, on what term, and when does that term end?
- When does money settle, and does that change at weekends?
- Can the rate be changed during the term, and with what notice?
Questions
The ones people ask next.
What is a good card processing rate for a UK shop?
For a small independent taking a few thousand a month, an effective rate of 1.4%–1.75% is common. Below about 1.2% all-in is good. What matters is the effective rate from your statement rather than the headline, because rental and per-transaction fees move it more than most people expect.
Is interchange plus cheaper than a blended rate?
Usually at higher volumes, because you keep the benefit of cheap consumer debit cards instead of paying an average. Below roughly £10,000 a month the simplicity of a flat rate is often worth more than the saving, particularly if it genuinely covers all card types.
Why is my effective rate higher than the rate I was quoted?
Almost always one of three things: commercial or international cards charged at a higher tier, a per-transaction authorisation fee, or terminal rental and compliance charges counted into the same total. Add every line on the statement and divide by the value processed to see the real figure.
Should the card machine be integrated with the till?
It removes a real source of error, because the amount is never keyed twice, and it makes the shift end reconcile without manual work. The trade-off is that integrated processing usually means taking the till supplier’s rate rather than negotiating separately, so compare the rate as well as the convenience.
What does epos-365 charge?
A flat 1% on UK debit and credit cards, published rather than quoted. Amex and commercial cards are priced separately and given in writing. Terminal rental is £19.50 a month for the card machine only, never for the till. It is all on the pricing page.
Want this applied to your own shop?
Tell us the trade, the number of tills and who takes your card payments. You get a written quote back on one page.