USEFUL INFO
Chapter 1 : The Basics

Understanding Card Payment Fees: What You're Really Paying For

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IN THIS LESSON

If you accept card payments, you’re paying fees — but do you know exactly what you’re being charged, or why?

This guide breaks down the different fees involved in taking card payments in the UK, what to look out for, and how to ensure you're not paying more than you need to.

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  • Card payment fees are charges applied every time a customer pays by card. These fees are paid to your merchant services provider and are made up of several components.

    1. Transaction Fees

      • A fee for every payment you take

      • Usually a percentage of the sale (e.g. 1.5%)

      • Can vary based on card type (debit, credit, international)

    2. Terminal Rental Fee

      • Monthly cost to use a PDQ/card machine

      • Typical range: £10–£25/month

    3. PCI DSS Compliance Fee

      • Charged for ensuring your payment setup meets security rules

      • Usually £5–£15/month

    4. Authorisation Fees

      • A few pence per transaction for confirming the payment with the card issuer

    5. Minimum Monthly Service Charge

      • If you don’t process enough transactions, you may be billed a fixed minimum

    6. Settlement or Withdrawal Fees

      • Some providers charge to transfer funds into your bank account (rare in the UK)

    7. Early Termination Fees

      • Charged if you cancel your contract early

    8. Statement/Reporting Fees

      • Admin fees for detailed monthly reports (avoidable with most modern providers)

    9. FX or International Fees

      • Higher rates applied to cards issued outside the UK or in other currencies

    10. Chargeback Fees

    • Fees for handling payment disputes or fraudulent transactions

    • Blended pricing:
      A flat rate (e.g. 1.75%) that includes all fees. Simple, but often more expensive.

    • Interchange-plus:
      You pay the actual card network fee (interchange) plus a fixed margin. More transparent but harder to understand.

    ✅ Tip: Interchange-plus can be cheaper for higher-volume or larger businesses, but confusing for small traders.

  • There’s no one-size-fits-all, but as a general guide:

    UK Debit Cards 0.3%–0.6%*

    UK Credit Cards 0.6%–1.5%*

    Amex or Foreign 1.9%–3%*

    App-based readers Flat rate (1.69%–1.75%)*

    • “Free” machines with inflated fees

    • Long contracts with steep exit fees

    • Extra fees for PCI non-compliance

    • Extra Charges for integrated EPOS setups

    • Extra Charges for using non-preferred integrated payment gateways

How to Check If You’re Overpaying

  • Review your merchant statement monthly

  • Check if you’re meeting minimums or being charged extras

  • Compare your rate to industry benchmarks

  • Look out for fees you don’t understand

  • Ask if you’re eligible for a better deal based on your volume

Final Thoughts

Card payment fees are a cost of doing business — but that doesn’t mean you should accept them blindly.

Understanding what you’re paying for is the first step to getting a better deal, especially if your contract hasn’t been reviewed in years.

🔍 Compare now or speak to an expert – no pressure, no jargon, just practical advice.